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The conspiracy to kill off Bentley Motors
By Alan C Smith
 
 

The reader may perhaps consider this title a little dramatic but a document has come into my posession that can throw some new light over the demise of Bentley Motors. This new document, of which I will apprise the reader shortly, set my mind racing and I started to reread all the relevant Bentley literature.

There is a difference between just reading through a book and reading to obtain information from a book. Innocuous statements out of context can be read in a different way when a particular theme is being pursued. In this article I will write down my conclusions but ask any reader who has better knowledge to come forward and enlighten us where there is any doubt about the subject matter.

There can be no doubt that Bentley Motors went into receivership and was acquired by Rolls Royce, but there is a doubt about some of the events leading up to this. There are four main participants in this drama and I will categorise them into two groups — the conspirators and the pawns.

 
 
 

The Conspirators

Woolf Barnato
Woolf Barnato came from a humble backround but was born into fabulous wealth. His wealth would naturally bring him into contact with the upper classes, but in the snobbish eyes of high society he would be looked down on, considered an upstart, a nouveau riche. This naturally would affect his personal outlook and probably made him very scrupulous about his public image.

Barnato was a complex character and in WO's opinion although a fine sportsman he had a different side when it came to business. Like other people in the same position, Barnato sought to overcome the class barrier by participating in sport and car racing, and posessed the talent and drive to excel in these activities.

When the opportunity came in 1926 to rescue Bentley Motors. He was probably flattered and saw that it would do him no harm to be part of the company and probably thought that he could turn the fortunes of the company around. He exacted a price for this by devaluing all the existing pound shares to one shilling.

What Barnato did not realise was that WO would resist his attempts to devalue the marque by introducing cheaper non-sporting models into the range. In Barnato's eyes, WO was not suitable to be managing director and was eventually replaced by one of Barnato's so called cronies.

In 1929 WO had reached a personal crisis, brought on by years of overwork, his failing marriage, the death of Burgess, the endless stress of the board meetings where he resisted the efforts of the other directors to initiate policies that he did not agree with. The 4-litre side valve engine was a failure and WO would not take the lead to put this right.

1929 showed a profit for the company and the start of the 4 Litre design proper with the engine using the Ricardo patent 'high power' cylinder head under the supervision of the new chief designer Barrington. 1930 saw intense activity in the drawing office putting the finishing touches to the 4 litre design and also in the engine shop where the prototype engines were assembled and tested.

The 4 litre was rushed into production and surely met the aims of the board as a luxury non-sporting car. However, Bentley customers had come to expect some degree of performance from Bentley cars, so the 4 litre must have been a disappointment to them. The other aim of the board to reduce the cost of manufacture was not possible without reducing quality and technical specification and in some respects the quality of the 4 litre is better than previous models. What had happened was that Bentley Motors had produced a car without the sporting pedigree the customers wanted and at a price that was more than the specification of the 4 litre warranted. The board hadn't listened to WO and paid the price for it.

One of the probable reasons that Barnato had taken over the company in 1926 was that he could see that being associated with a glamorous upward moving high profile company with considerable racing success would do his reputation no harm. He would also be able to race the factory prepared cars as much as he wanted. Conversely, in 1931, Barnato would have seen that the downturn in the fortunes of Bentley Motors could affect his public personna in a negative way. This is something he would not like.

In 1930, after the win at Le Mans, the official racing programme was halted. One good reason for this, apart from financial, was that despite the win at Le Mans, the Bentley cars were becoming outclassed by cars such as the Mercedes which trounced Bentley at the Irish Grand Prix and the Alfa Romeos similarly at the Ulster Grand Prix both in 1930.

There seems to be no record of Barnato racing after his Le Mans victory in 1930. Barnato had probably made a personal decision to retire from racing, perhaps through family persuasion, although he continued to construct racing cars in private with Wally Hassan. So that his main reason for continuing to support Bentley Motors was removed.

As we know, by now, the Wall Street crash was affecting the luxury car market in the UK and Barnato faced having to continue to keep the company afloat with money from his own pocket.

Rolls Royce Ltd
Royce was suffering from bad health and was leading his design team from offices in Sussex and the South of France, alternating between the two.

Bentley Motors was a thorn in Royce's side. We have all read in the Review reports by RR personell in which grudging praise is given to the 6½ litre although also commenting on the rough edges of the car. Of course RR designs had a much longer gestation period than the Bentley products because RR had a much more stable economic base, whereas the economic climate at Bentley Motors dictated a minimum of time to produce new models, which would account for this discrepancy. Bentley cars benefitted from the racing successes which gave the cars that certain cachet that the RR products could never have.

Royce kept a close eye on developments at Bentley Motors and when the opportunity came along to shut down the company he took it. Royce never had any intention to continue the manufacture of Bentley cars, all he wanted in his final years was to eradicate the Bentley threat. However, as we will see, things didn't go exactly as he planned.

The Pawns

WO
WO was undoubtedly a pawn in this game. His life and livelihood had been Bentley Motors, and to avoid the company going under in 1926, he and his fellow shareholders had to accept a deal dictated by Barnato, which devalued their shares from one pound to one shilling. Which in WO's case wiped out his capital although he was still receiving a good salary from the company.

Barnato very astutely made it a condition that WO sign a service contract which tied him to the company. The importance of this will become apparent later.

WO says that he and Barnato were friends, perhaps Barnato was friendly enough to WO's face, but in reality although keeping WO on as chief engineer, because of the conflict of policy between WO and the board, Barnato would consider him unfit to be managing director and replace him.

WO didn't have much going for him after the Barnato takeover, basically he became an employee of Bentley motors. His share capital was not sufficient for any control of the company, his position as managing director was just as a figurehead. The public perception of WO was that he was a rich and successful man, after all he lived in a posh house (rented) and drove around in the latest Bentley (belonging to the company) and of course he was the managing director of a famous company (in continual financial trouble).

Because of his pathological shyness he was not a social animal and I can't imagine him doing the Charleston at the Cafe De Paris. He was vulnerable to the attentions of women who made the going and became married to a society lady who loved the round of coctail parties. WO was not the kind of man to make small talk at parties, he was, I think a workaholic and spent too many hours at work. The marriage was an unfortunate mistake and ended in a messy divorce after the company went to RR.

In 1929 WO was suffering the chagrin of a doomed marraige, the board would not listen to him about the future of the company, his friend and chief designer Burgess was terminally ill. The company was in dire straights.

The picture I'm trying to paint here is that WO was a man in crisis, no longer in control of his destiny, he was being forced to do things by the board which he considered to be wrong and he just refused to carry out the instructions of the board when asked to design the pushrod OHV for the 4 litre engine. Barnato would have seen WO as a problem, it's doubtful that they were real friends.

In a way Barnato did WO a favour by letting the firm go under as WO writes in his autobiographies that he spent some happy times working for RR testing the Derby Bentley prototypes often abroad with his new wife Margaret.

Ricardo
Ricardo lived not far from Royce, whilst I don't think that they were actually close friends, they enjoyed family picnics together and sailed together on Ricardo's yacht the Pearl.

Ricardo depended on Royce for work for his consultancy so was vulnerable to pressure from Royce to reveal details of the work he was carrying out for Bentley Motors.

Recently I discovered the following letter written by Ricardo to Elliott one of Royce's senior engineers based at Royce's sattelite office near Chichester. The original is not good enough to copy but here is a verbatim transcript.

 
  HRR / S / 33200.

27th April . 1931 .
 
     
 

C. Elliot Esq.,
Elmstead,
West Wittering,
Nr. Chichester.

My Dear Elliot,

Forgive me for not having replied before to your letter of the 18th. The B .M .E .P. of the six – cylinder Bentley engine is not as high as it aught to be or as we had got either on our experimental cylinder here or on their single – cylinder , but the results you have are those which were obtained straight off the reel from the first engine built, and when rigged up with a silencer, and all conditions as nearly as possible as they would be in the car. Not only the engine but the whole chassis is new, and Bentleys were very anxious to get the engine on to the road to test out the chassis as soon as possible. Finding that the engine gave the maximum power which we and they had anticipated, they took it off the test bench without any further tuning and started on their road tests. They have promised later either to let us have an engine here or to let us play with one on their test – bed, when I hope to do a good deal better, for we have not yet tried a single one of the many variables such as valve timing , compression ratio, etc . Bentleys tell us that under no circumstances can the engine be made to detonate and that it is very smooth running, from which I infer that we could probably afford to increase the compression ratio - our own tests indicated that we could go above 6:1 on ordinary Shell petrol.

Yours Sincerely,

 
     
 

The letter is the unsigned duplicate carbon copy obtained when the typist typed out the letter after dictation by Ricardo.

What Ricardo is saying here is that the BMEP of the engine is lower than it should be. Which means as the torque and horsepower are a function of the BMEP the torque and horsepower would be lower than expected. The maximum power, which is not quoted, is claimed by Bentleys to be as anticipated. This seems evasive and the comment by Bentleys "that under no circumstances can the engine be made to detonate" is completely opposite to the results obtained from the tests Ricardo carried out on engine VA 4092 supplied to them by Bentleys on 08/06/31. Were Bentleys misleading Ricardo?

The letter is written in a friendly conspiratorial style revealing the relationship between Royce and Ricardo and shows complete disregard for the secrecy agreement which is always in place between the consultant and the client (Bentleys). According to the text of the letter, Elliott had already obtained the test results from the first prototype engine, which Ricardo had obviously received from Bentley Motors, and Ricardo's apology at the beginning of the letter was probably due to having had a reminder call from Elliott.

Royce must have been very concerned about what Bentley Motors were doing to make Ricardo break his secrecy agreement with Bentley. Although I believe that an honourable person like Ricardo would have asked permission from Bentleys before disclosing any information to Royce.

The letter sounds reasonably hopeful about the 4 litre's performance and possibilities and probably gave Royce a few worries. But this was not really the true situation.

Ricardo's patent for the high power head was taken out after CIS, a subsidiary of Chenard Et Walcker of Genvilliers a suburb north of Paris, who were the agents for Ricardo's patents in europe, developed a version of Ricardo's sidevalve turbulent head where the inlet valve was located in the head and the exhaust valve in the block. This was called the High Power Head and was the configuration incorporated into the 4 litre engine.

This was not the first so-called F head developed by Chenard, the difference here was, that Ricardo's patented sidevalve Turbulent Head had been used as the basis for the High Power Head. The Turbulent Head was limited to a maximum compression ratio of about 6 to 1. The High Power Head had the advantage that larger valves could be used as now the valves were not side-by-side and that it could attain a higher compression ratio.

Chenard Et Walcker in 1927 had developed a 1.5 litre engine incorporating the High Power Head which was installed into a model called the tank, obviously based on the famous Bugatti tank coachwork. So far I haven't been able to find out the power output, but it was raced at Le Mans, and was quite powerful being capable of a top speed of 129 km/h. The 9cv, as the engine was designated, remained in production until 1935.

What I'm building up to here is why was the Bentley engine so troubled when surely Ricardo had all the information he needed from Chenard to ensure a success for Bentley.

I have a suspicion that Ricardo was not as helpful to Bentley Motors as he could have been. This suspicion is reinforced by some of the drawings that Ricardo issued to Bentley. The first drawing showing the cross section of the cylinder and head is ok but the inlet valve is too near the piston closely following the sketch included in Ricardo's Patent No. 280,544. Other drawings such as a layout for engine mountings based on coil springs has been designed by someone, probably a young graduate, who has a theoretical background but little practical experience. Needless to say, Barrington did not adopt this system for the 4 litre. Either Ricardo did not put his best men onto the 4 litre project, or they were the best that he had available.

Ricardo designed a 3 litre engine for Lagonda in 1930 that was never put into production. This engine achieved a power output of 100 hp, that is 33 1/3 hp per litre. Therefore, interpolating for a 4 litre version, the hp would be 133 1/3. The 4 litre bentley engine had an official output of 120 hp, however I cannot find a test result that shows more than 110 hp. Can we trust the official figures? Evidently the power output of the 4 litre was 23 hp lower than it should have been. The 4 litre did not achieve it's potential, that is sure, but the reason for this is not so sure.

The Coup de Grace
The accepted version of events around the demise of Bentley Motors is:

09/06/1931 Carruth, on behalf of Barnato, telephones Sidgreaves MD of RR about merger.

10/06/1931 Carruth writes letter to Sidgreaves about merger.

15/06/1931 Barnato refuses to make the monthly interest payment to the London Life Association. There remained 15 days grace to make the payment before the mortgage was called in.

17/06/1931 Sidgreaves writes letter to Carruth seeking more information.

18/06/1931 Carruth replies to Sidgreaves including amongst the information the status of WO's contract with Bentley Motors. "Mr W.O.Bentley is under contract as Chief Engineer of the Company for life so long as royalties amounting to not less than 1,000 pounds per annum are paid to him & rdquo;. Presumably in answer to a question by Sidgreaves.

24/06/1931 Sidgreaves writes to Carruth giving the decision of the RR board which met on the 23rd deciding against the merger.

10/07/1931 Barnato appoints Carruth as his receiver.
Patrick Frere appointed receiver for London Life Association.

28/07/1931 Financial Times reports that Napier are interested in purchasing Bentley Motors. WO allowed to start work on the proposed new Napier Bentley.

09/09/1931 With the negotiations for the purchase of Bentley Motors well advanced, the decision to wind up Bentley Motors taken. Montgomerie the company secretary appointed as the liquidator.
Secret negotiations are started between Barnato and RR for the sale of Bentleys.

20/10/1931 Sale of Bentley Motors to Napier approved by the court. Preliminary contract drawn up.

17/11/1931 In court Napiers outbid by British Equitable Trust acting on behalf of RR. Rolls Royce are now the owners of the company.

1934 Barnato becomes director of Rolls Royce. Having, according to WO, bought a considerable number of RR shares before the liquidation of Bentley Motors.

So there we have it a sad sad story, but let's look at a slightly different version of events. Barnato refuses to pay the interest on a mortgage to The London Life Association due on the 15/06/31. This is before the negotiations with RR on the merger had been concluded. Either Barnato had decided to let the company go no matter what happened with RR or he had already made a private agreement with Royce about letting the company go into liquidation.

Barnato was the key person in this drama, he could have kept the company going by radical restructuring, but he didn't do this, he obviously just wanted to get rid of the company. Royce wanted to end the Bentley threat to RR and Barnato was the one person who could make this possible, as he basically owned both Bentley Motors and WO himself. However Royce didn't want to buy the company as a going concern, it would be too expensive, as he had no intention of continuing production of the Bentley designed cars. He wanted Barnato to put Bentley Motors into receivership so he could buy it for a song. Not only would he aquire the company, but thanks to the service contract, could also keep WO from starting up again elsewhere. There would be no point in him buying the company and liquidating it without being able to prevent WO from just starting up again with another company.

Why would Barnato let Bentley Motors go into receivership? As this would have been seen as a negative action reflecting on his wealth and public image, something we have noted that Barnato was probably very sensitive about. There must have been a very compelling reason for doing this, as he was not just going to lose face, but also a great deal of money as well. In his statement to the press, Barnato makes it quite plain that his decision to put Bentleys into receivership is financial, he is clearly, for some reason, taking all the blame for the demise of the company on his own head, perhaps as agreed with RR to deflect attention from their future actions.

As has been suggested by others including WO, Barnato either was allocated or bought RR shares before calling in the receiver, as of course when the dealing in Bentley shares was suspended on the stock exchange, it would have been very likely that the RR shares would increase in value.

Royce had speculated that there would be no interest by third parties in buying Bentley Motors, however he was wrong, Napier's interest was a bigger threat than ever to RR. So again Barnato was involved in secret talks with RR to secure the sale of Bentley Motors, this was acomplished on 17/11/1931, WO's hopes were finally dashed and when the dust had settled, Barnato went on to become a director of RR in 1934 presumably for services rendered.

Postscript
Some time has passed since I wrote this article and in the meantime my mind has been churning over the events that I have written down.

Relooking at the letter sent by Ricardo to Elliott which was written on 27 April 1931 and the date that Barnato approached RR about a merger on the 9th June 1931. There were just over five weeks between the two events.

Barnato surely did not suddenly decide to approach RR about a merger on the 9th June, he must have been looking for an honourable way out of ownership of Bentley Motors for some time, and possibly approached Royce informally at an earlier date. There is a possibility that Barnato, intending to sell Bentleys to RR and in order to make the company more desireable, ordered WO or Barrington to give some misinformation to Ricardo knowing of the relationship between him and Royce, or perhaps Ricardo asked WO confidentially if he could pass on information about the 4 litre to Royce and was given incorrect information to pass on.

The only information that Ricardo posessed, apart from the single cylinder test results and the first Bentley engine test (which he did not witness) was hearsay, and the engine power curve given to him by Bentleys could have been doctored to reflect the single cylinder output.

What has raised my suspicions is the line in the letter "Bentleys tell us that under no circumstances can the engine be made to detonate". Why make this statement unless Elliott had asked the question? This answer is clearly untrue as the engine given to Ricardos for test on the 8th June exhibited chronic preignition and this, apart from the need to improve the poor torque and power output, was the main goal for the test engineers to eliminate.

Recently I had the pleasure of reading Diana Barnato Walker's excellent book "Spreading My Wings". There was not a vast amount of information about her father Wolf Barnato, however, she reveals that Barnato was a very talented sportsman who kept wicket for Surrey, was a top shot, could beat anyone at tennis, he rode, swam, skied like a bomb, played golf and liked to box. He was undoubtedly a tough guy, a man's man but could be moved to tears on occasion, notably, when Clive Dunfee was killed at Brooklands.

 
Click for larger view
 
     
 

Barnato clearly had a weakness for the fair sex, his affair with June, the actress, led to the divorce from Diana's mother. He remarried in 1932 to Jacqueline Queagly of San Francisco, the daughter of a Californian coal magnate. They were divorced in 1940.

WO wrote in his autobiography that on the 11th July, when the Times newspaper broke the news about Bentleys going into receivership, Barnato was in America engrossed in Business and personal matters (WO was hinting at something here). Others have said that Barnato was pursuing an American lady at that time. We now know that he was actually in the UK on this date, but what I'm leading up to is possibly the real reason for Barnato's haste to get rid of Bentleys.

As we know, Barnato never raced after his victory at Le Mans. Even if the Bentley cars were no longer competetive, with his wealth he could afford to buy any car that he wanted and continue racing after the liquidation, but he didn't. Barnato still toyed with the idea of racing by having Wally Hassan rebuild Old No One with an eight litre engine and construct the Barnato Hassan single seater racing car built from Bentley parts, but he never raced it himself. By doing this, Barnato showed that he still wanted to race but was prevented from doing so for some reason.

In Wally Hassan´s autobiography "Climax In Coventry" he devotes a chapter to his employment with Barnato. Several very interesting points emerge, Hassan tells of being summoned to Ardenrun by Barnato just after the sale of Bentley to RR, and being offered a job looking after Barnato's cars. During the conversation, Barnato mentions that although he was no longer chairman of Bentley Motors, he was still on the board of directors of RR (This was in 1931 and contradicts the accepted date of Barnato's directorship of RR).

Hassan also confirms that Barnato was still rich and mentions the polished brass nameplates of Barnato's companies adorning both sides of his London office door. He also tells of Barnato obtaining an eight litre engine from RR to put into Old No. One, which shows that Barnato must have had some considerable influence at RR. Another anomaly is that when Barnato called Hassan to his office in 1936 and gently let him go by offering to use his influence to get Hassan a position at RR, one of the reasons Barnato gave to Hassan for this decision was that he had not raced since the death of Clive Dunfee at Brooklands whilst driving Old No One in the BRDC 500 mile race on 24th September 1932.

Actually Barnato had not raced since Le Mans 1930 and used other drivers to drive his racing cars although Hassan does mention that Barnato did some test driving. Usually people give up racing for reasons such as an accident or decrease of competitiveness, this did not apply to Barnato, he was a superb driver in his prime. That is why I suspect that the reason he gave up racing and Bentley Motors was because of a promise to somebody, possibly a woman.

One should never underestimate the power of a woman over a testosterone driven man. History is littered with examples of powerful men that were putty in the hands of a beautiful woman.

My theory is that Barnato was smitten with Jacqueline Queagly who was a mormon and wanted to marry her, which he did in 1932, and that she would only agree if he gave up racing. In order to prove this to her he planned to get rid of Bentley Motors as quickly as possible, this would explain his haste. After all, Bentley Motors was probably only a small part of his portfolio, and had outlived its usefulness to him.

In his statement to the press Barnato gives financial reasons for letting Bentley Motors go into receivership. Put yourself in his place, being a tough guy, the last thing you would want the public to think, would be that you were doing all this this just to win a wife. Better the financial reason (which most people consider to be untrue). I don't think that Barnato originally intended that Bentley Motors be killed off, but once started, the sequence of events led up to this happening.

Perhaps there is someone out there who can confirm this theory, but just think about it if it were true, what an irony, Bentley Motors killed off for the sake of a woman.

 
 
 
 

Read Alan Smith's blog dedicated to the vintage Bentley.
Click here for Alan Smith's Vintage Bentley Spares.

 
 
Newspaper clippings courtesy of Tim Houlding
Posted on Dec 24, 2013
 
 
 
 
 
 
 
 
Sep 30, 2020 - Info and photograph received from Simon Hunt for Chassis No. RL3439
Sep 30, 2020 - Info and photographs received from Dick Clay for Chassis No. 147
Sep 29, 2020 - Info and photographs received from Ernst Jan Krudop for his Chassis No. AX1651
Sep 28, 2020 - Info and photographs received from Lars Hedborg for his Chassis No. KL3590
Sep 25, 2020 - Info and photograph added for Registration No. XV 3207
Sep 24, 2020 - Info and photograph added for Registration No. YM 7165
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