Mellon vs Churchill

The Untold Story of Treasury Titan at War

Review in Project
CAVEAT I cannot take seriously the idea that Editorial Pegasus is plotting a financial crisis in the United Kingdom to guarantee the editorial success of the last book that I have been informed has already been published on a subject that exudes current parallels: "Mellon vs Churchill: the untold history of Treasury Titan at War" (2025), by Jill Eicher. Instead, it would be the other way around, of course: the present gently compels us to want to read about similar facts happened in the past. Not the same meaning of causal relationships vs simple concurrences. I am waiting to start my copy, which I will read to draw parallels with the most recent news.

The confrontation between Andrew Mellon, United States Secretary of the Treasury and Winston Churchill, Chancellor of the Exchequer of the United Kingdom, focused on managing the debts Britain incurred with the United States during and after World War I. In the aftermath of the conflict, the United Kingdom was in a precarious financial situation and sought to alleviate its debt burden. Churchill advocated significantly reducing or cancelling these obligations to maintain his country's social and economic stability. In contrast, Mellon insisted on full repayment of the loans to ensure the financial stability of the United States and to reinforce international credibility in the American economic system. The review published by Foreign Affairs is really tasty to want to overlook it.

"Mellon vs. Churchill: The Untold Story of Treasury Titans at War" by Jill Eicher: Offering a detailed look at the Mellon-Churchill confrontation, this book provided the context for understanding the interwar period's economic policies and international relations.

This disagreement reflected the tensions between the two countries' economic policies in the interwar period. While Britain struggled to recover economically and maintain its global position, the United States emerged as an economic power interested in consolidating its financial influence. Mellon's insistence on full payment of debts underlined the importance the United States placed on fiscal responsibility and the stability of the international financial system.

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The Mystery of Banking

It is widely assumed (ironic) that high-ranking military officers are clear that there is always a bank behind every war, over and above any other apparent cause for a conflict; whoever says a bank could be referring to an economic situation in general or, more specifically, to access to resources in particular. Economist Murray Rothbard critically analysed the United Kingdom's financial situation before and after the First World War. Rothbard argued that expansionary monetary policies and reliance on debt led to economic instabilities.

Murray Rothbard's "The Banking Mystery" analyses the history of banking and monetary policies and offers a critical perspective on the financial practices that led to the economic crises of the 20th century.

Rothbard examines how banking practices and government policies contributed to the financial crises of the time. I have read this book and will take the opportunity to review it. Both titles are a winning dupla, as they would say in Rio de la Plata. History does not repeat itself, but since it does rhyme, we will see what we could expect to happen from those powders to find out about these possible muds in the spring of 2025.

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Aetiology of Conflicts: Patterns

Both titles are promising. The conflict between Mellon and Churchill can be interpreted as an early manifestation of the economic disputes that have shaped international relations in the twentieth century. By studying their aetiology, we can identify recurring patterns in history:

- Structural tensions between established and emerging powers.

- Divergences in the perception of financial and political problems.

- Errors in conflict resolution that lay the groundwork for future crises.

Understanding these patterns facilitates a more pragmatic and less ideological approach to contemporary conflict resolution. Ultimately, the "forensic" study of disputes like this allows us to learn how to anticipate, mitigate and manage conflicts before they escalate into global crises.

The Mellon - Churchill confrontation, seen from the perspective of the aetiology of international conflicts, reveals several layers of analysis on the origin, evolution and resolution of disputes between nations. I already knew the general lines of this confrontation, but going over the details of the events can provide quite a few clues, especially about the less evident aspects of the personalities of those who intervened in it. Three key approaches can be extracted for a "forensic autopsy" of international conflicts:

1. Structural causes of conflicts: debt as a driver of tensions

A structural disparity was at the root of this conflict: the United Kingdom, a traditional power, was weakened after the First World War, while the United States was emerging as the new global financial centre. Mellon's rigidity regarding debt repayments reflected not only the United States' economic stance but also its desire to consolidate its financial dominance.

These kinds of structural conflicts appear throughout history: when an emerging power challenges the supremacy of an established power or when economic conditions generate unsustainable tensions. One might think of a situation similar to a "Thucydides Trap" that explains how changes in the balance of power can lead to conflicts, which can be subtly reflected in the economic field before manifesting itself in the military.

Reviewing the names of the protagonists of that time and identifying those of the present moment can prove to be a clarifying exercise to make a calm reflection on the present. The transatlantic relationship has already given enough surprises in recent months. Thus, we had Mellon, today Scott Bressen, and we had Churchill, today Raquel Reeves. However, we must not overlook the current confrontation with other contemporary partners, NATO and the EU, in a triangulation that is sometimes suggestive and sometimes specious. Thus, raising the bar, we will have Mr Trump and Mr Starmer, by supranational connection, Mr Rutte and Mrs Von der Leyen, and below the Trump and Starmer, Mr Bressen and Mrs Reeves.

2. The core of the conflict: divergent perceptions and priorities

Churchill saw debt as a problem of social and economic stability, while Mellon saw it as a matter of financial discipline and international credibility. This illustrates how international conflicts arise from material differences and differences in perception of the problem. I have no doubt that a clear disparity persists here between the European and American spirit after the Obama-Biden era.

Forensic analysis of international conflicts must consider objective facts (debt, ability to pay, economic impact) and the paradigms under which actors make decisions. In international politics, both parties often have legitimate reasons according to their own perspective, which makes negotiation difficult. Perspectives that have consistently diverged over time between both parties, with particular relevance in recent months.

3. Factors that prevent or facilitate conflict resolution

This case apparently shows how the lack of flexibility in negotiating the British debt generated pressures that contributed to internal economic tensions in the United Kingdom, which indirectly affected the stability of the interwar period. Although maybe it wasn't like that; and that's what Mr. Eicher's book reading project is for. In terms of conflict resolution, this type of financial intransigence can be seen as a precedent of other crises, such as the war debts imposed on Germany in the Treaty of Versailles, which contributed to the rise of Nazism. But you can't give for everything ventured. Was England a reliable partner in the interwar period?

A forensic approach to conflicts must examine which factors prevent the parties from adapting to new realities. Rigidity in debt negotiation is a recurring theme in history and has contributed to economic collapses and conflicts. Such would be the cases of the Latin American debt crises in the 1980s or the tensions with Greece in the Eurozone after 2008. But it can also take the reader beyond these limits and promptly approach our most angry present to discover that what was conventionally white turned out to be black and vice versa.

What has been happening in recent years far today? This question is not inappropriate to ask as an exercise in understanding history and the lessons it can give us. At the moment, institutes such as NATO (in which the United Kingdom is involved, but little engaged as long as it is someone else - the USA - who pays the most of the costs) or the EU (in which the United Kingdom perseveres in wanting to lead from the outside, thoug little involved because it knows that it will not have to pay almost none about costs); the NATO and the EU are already not only committed but seriously involved to know if they will be able to survive in the coming years. Although first of all, it is convenient to read and review both titles in the 'dupla' before venturing to any conclusion.

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