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100 Years since Chapman joined Arsenal part 17: very dubious dealings

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Previously in this series

As we have seen in the previous episode, Leeds City FC was closed down in 1919, and Chapman left.  However, the club did not die for it very quickly re-appeared in 1919 as Leeds United.   This club was then immediately invited to join the Midland League, taking over the place vacated by Leeds City Reserves who had of course folded when the club was ejected by the Football League.   Leeds United then bought back the Elland Road stadium from Yorkshire Amateurs who had taken it over after the disbandment of Leeds City.

And so, in a very short space of time, Leeds City FC died, and was not only reborn but was also welcomed back into the footballing world!   But even that curious about turn, is not all.

For then in an even stranger move, the chair of Huddersfield Town FC made a loan to Leeds United FC of £35,000 which was to be repaid only when Leeds were promoted to the first division!

On a straight calculation based on inflation, £35,000 would be worth about £19 million today, making this a most extraordinary loan, for which there were almost certainly other benefits accruing to the lender, the details of which have either been lost in time, or were simply not revealed at the time.

However, we might assume that the Huddersfield directors felt that having two professional clubs in West Yorkshire could add to local rivalry (they are 20 miles apart), in the way that Arsenal and Tottenham had created a rivalry after Arsenal moved north of the river (although there the distance is only four miles).  And who knows what other plans were made to help establish professional football in the area?  That Leeds United are currently in the Championship and Huddersfield Town in League One, should not lead us to believe that they did not each see themselves as part of the natural future hotbed of football.   League football was indeed a northern affair, and the directors of both clubs quite probably saw themselves as part of a significant and growing business and sporting arena.

And yet initially while these extraordinary machinations were going on (for “machinations” they certainly were, and they effectively meant that Leeds City were back in business as Leeds United), we have no record of anyone approaching Chapman and offering him another job in football.  And that is odd, for while a club needs a ground, it also needs a manager, and it seems that either no one at Leeds wanted Chapman back, or (and perhaps this was more likely), Chapman did not want to return to the club that had, he felt, treated him quite badly, and/or been involved in what might best be called potentially dubious business dealings – for which he had been in part blamed without (as far as we know) a shred of evidence against him.

Herbert Chapman therefore moved back to working in industry, as he had done through the First World War, and from such records as remain it appears that he himself made no move to return to the game until 1921 when (seemingly out of the blue) Huddersfield Town approached him.

From the information to hand it appears that Chapman did very quickly agree to return to football if his own ban could be overturned  – although I imagine this would not have been seen as too much of a problem given the way Leeds United had risen from the ashes of Leeds City, and the success Chapman had had at Leeds City.   He had after all taken them to their highest ever position (fourth in the Second Division) and during the war had seemingly won several wartime honours with Chapman still in charge (although I am sorry to say I can’t find the exact details of which honours, only that there were some).

So together, Huddersfield Town and Chapman, approached the League for his lifetime ban from football to be rescinded on the not implausible grounds that as club secretary / manager he had no engagement with or control over what happened at the board level, other than the delivering of reports on matters on the pitch.   Indeed it was and always had been patently obvious that if the owners of the club were up to no good, the last person they were going to tell was the club secretary.

The point here is that Leeds City, like all professional clubs, was a limited company, meaning that the shareholders had limited liability for the actions or debts of the company and indeed limited liability for any misdemeanours perpetrated by the directors of the company.  But Leeds City, like all football clubs, had also agreed to abide by the rules and regulations of the league that it was in.  And thus the dispute that ended Leeds City’s life revolved around that issue: did the rules of the League allow the League to demand to see confidential documents?  The League said yes, the club directors said no, and the League then threw Leeds City out.

But this issue did raise the fact that league clubs were beholden both to the Football League and to the laws of the land regarding the operation of limited liability companies (that is to say those that these days generally have the letters “Ltd” after their name.)   Prior to the events at Leeds City FC  no one had ever tested or challenged which of these two competing factors that ruled football was supreme – company law or the rules of the Football League.

By refusing to hand over confidential documents, this was in fact the issue that the directors of Leeds City had been raising.   Only a court case which might well have ended up not just in the High Court, but also the Court of Appeal, could have resolved this, and neither side seemed to want to engage in this fight.  And that still seems quite a reasonable stance, given that the prime asset of Leeds City FC – the ground – was still owned by the shareholders, who could now sell it on for any purpose that was proposed.

If it were the case that the directors of Leeds City had been appropriating money from the club for their own expenses (and one is tempted to say – especially in relation to these early days of professional football, surely it was ever thus), then with the collapse of their club probably meant that these directors got away with whatever it was they were up to.   As for the owners of the Leeds City ground, whoever they were (and I can find no record, but I suspect it might well have been the directors of the club who were banned from football along with Chapman) what they would have wanted was a tenant back in situ, paying a decent rent.  With Leeds City effectively morphing into Leeds United, they got exactly what they were after, and avoided any punished other than being banned from football, which given a tidy profit, they probably didn’t mind.

As for Chapman, he didn’t have the wealth that I presume the ground owning directors had, but he seemed to have no problem in finding a decent job outside of football.  And indeed we should remember that in the early 20th century, the laws that we now take as part of the natural protection of workers (such as the ability of employees to take employers to court for unfair dismissal) did not exist.   The laws of the day were written by company directors for the benefit of company directors, and workers’ rights would only begin to be seen with the rise of the Labour Party.  Now that political party, although founded in 1900, did not emerge as a force until the mid-1920s.  It did not become the largest party in the House of Commons until 1929, but even then could not form a majority government.

Such information as we have on Chapman’s personal views both then, and from his time at Arsenal, strongly suggest he was not a Labour supporter and he thus would have had no political allies to turn to, in order to fight his case and challenge the “banned for life” ruling by the League, even if he had wanted to.   And thus he left the issue and did the obvious thing: he found work elsewhere.

But when he did want to come back into football, that ruling against him had to be overturned, and how Chapman came back into football thus represents the next period of Chapman’s life.

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