GREAT BRITAIN: War all Over

(See front cover)

As a rule, Britain’s destinies are guided by Britain’s politicians. Britannia waived that rule last week. ‘In the face of the nation’s gravest economic crisis it became increasingly evident as the days went on that leading international financiers had taken hold and were pulling the wires that made the wheels go round.

Things moved with despatch. The Labor Cabinet that could not bring itself to cut the Dole, fell. A Coalition Cabinet took office, promptly cut the salaries of 300,000 civil servants for an annual saving of $4,000,000. Within 48 hours bankers in New York and Paris had given Britain a new loan of $400,000,000.

In the anxious days of the Hoover Moratorium, Germany’s financial crisis and the first emergency credit for Britain, the House of Morgan, France’s bank in the U. S., was as silent as the tomb of Tutankhamen. Observers noted how quickly the name of Morgan popped into the headlines now that there was no question of conflicting with French policies. Morgan headed the list of 110 U. S. banks which underwrote the U. S. half of the loan. Sir Frederick William Leith-Ross, Deputy Controller of Finance, flew to Paris and arranged details of the other $200,000,000 with the Bank of France. None of this money will be used to pay off the $243,000,000 which was loaned Britain on Aug. 1.

Enlightened Selfishness. Wall Street was secretive about details of its share — rates of interest, maturity dates, etc., etc. — except to say that it would not be passed on to the public. The French were frank er. The French credit will run for a year and the Paris bankers are anxious to con vert it on maturity into a 20-year long term loan. At least $100,000,000 of their share will be sold to the public immediately at 4½%.

Morgan Partner Thomas William Lamont explained that U. S. participation was “an act of enlightened selfishness calculated to be of great benefit to this country as well as Great Britain. . . . The Central European financial crisis has had serious repercussions upon our own economy. When it is considered how much more serious would be the effects of a British crisis the action of the bankers in coming to the defense of sterling is almost as much a measure “toward financial recovery here as abroad.” Quickly he added that Wall Street had exerted no pressure, had made no political stipulations before going to the aid of Britain.

“Pistol at Our Heads.” Ramsay MacDonald said the same thing, so did the U. S. State Department. But the Daily Herald, official organ of the British Labor Party, would have none of it. It quoted Laborite Ernest Thurtle, former Junior Lord of the Treasury:

“With reference to the dispute as to whether American bankers tried to impose conditions regarding national finances in return for establishing credits, Mr. MacDonald at his interview with the Junior Ministers of Monday last told them that the proposals which the Government had submitted to the Bank of England had to be telephoned to America to see if they could be approved there.”

The Herald also put on record Dr. Christopher Addison, anatomist and for a time Minister of Agriculture in the Laborite Cabinet. Said he:

“Dreadful curtailment to the extent of $280,000,000 had been accepted and further proposals had been made. . . . We were then told our method was inadequate and more must be provided. . . . Finally we were told it would be acceptable to the Conservatives and Liberals provided it was acceptable to the bankers that a further 10% deduction should be made from the unemployment pay. The pistol that had been put to our heads all the time was not in the hands of the Trades Union Congress but in the hands of the controllers of the money market.”

Vanishment. One person who could have said whether U. S. pressure was brought to bear or not was fox-bearded Montagu Collet Norman, Governor of the Bank of England. Last week he disappeared completely. He was not in Quebec, where he was supposed to be, nor was he in Ottawa or Montreal. News-hounds could not flush his grey brush in New York or Washington.

National Government. Scot MacDonald having, with the assistance of Liberal and Conservative leaders, solemnly buried his Labor Cabinet, rode to Buckingham Palace last week with his new Ministers to take office as head of what was immediately dubbed the National Government. They were:

Laborites.

James Ramsay MacDonald—Prime Minister.

Philip Snowden—Chancellor of the Exchequer.

James Henry Thomas—Secretary for the Dominions and Colonies.

Baron Sankey—Lord Chancellor.

Liberals.

Sir Herbert Samuel—Home Secretary.

Marquess of Reading—Foreign Secretary.

Marquess of Crewe—Secretary of State for War.

Conservatives.

Stanley Baldwin—Lord Privy Seal.

Sir Samuel Hoare—Secretary of State for India.

Neville Chamberlain—Minister of Health.

Sir Philip Cunliffe-Lister—President of the Board of Trade.

In the audience room they all knelt, with the exception of crippled Philip Snowden who was excused, “kissed hands'” and received the small leather cases containing their seals of office from George V. There was no actual osculation. In spite of the fact that all of these gentlemen had been through this ceremony before, they were warned by a whispering usher in knee breeches merely to bow over the royal fingers.

Not counting the Prime Minister, there were only ten Ministers. It was not only the first Coalition Cabinet since the War but also the smallest, most mobile. A place was held open for Great Britain’s last Coalition Prime Minister, David Lloyd George, but that wary Welshman was not so sure. He realized the necessity for the new Government and he sent his right-hand man, Sir Herbert Samuel, to represent him on it. But he realized fully that this was a bankers’ Cabinet put into office to get a certain thing done as quickly as possible, that the men who pulled the wires would allow no Lloyd George bargaining and political trickery. Therefore he stayed out, blamed his illness, contented himself with the statement that he was “in complete accord with what is being done.”

Reading. As it is. Lloyd George’s influence will be very great. The new Cabinet has a Liberal Home Secretary, a Liberal Foreign Secretary, a Liberal Secretary of War. Even if the National Government lasts only six months. Foreign Secretary Lord Reading’s job will be vital. He will have to tackle not only the September meeting of the League of Nations which must pave the way for the next great disarmament conference, but also the India Round Table Conference to which recalcitrant St. Gandhi was finally on his way last week (see p. 23).

For that he is well prepared. Rufus Daniel Isaacs, the pale little Jew who once was a cabin boy on a windjammer, has been successively an unsuccessful stock broker, a brilliant lawyer, a member of Parliament. Lord Chief Justice of England, Special Ambassador to the U. S. and Viceroy of India. He was the first Viceroy to come to grips with Gandhi, in 1921. Indian observers rate him midway between the conciliatory Lord Irwin and stiffnecked Lord Chelmsford. His first wife, the brilliant, gracious Alice Edith Cohen, is supposed to have exerted great influence in molding his career. Lord Reading, 70, likes clever women. Month ago he married his secretary. Miss Stella Charnaud, a handsome woman of 37 who has been not only his typist but his chief political adviser for years. She has been called “the most remarkable woman in London.” One Wall Street firm believed the appellation enough to offer her a $25,000 a year job, which Miss Charnaud promptly refused.

Brother Neville. As the week progressed it became apparent that the new National Government is not national at all but a Liberal-Conservative group in which three brave men, personal followers of white-haloed Ramsay MacDonald, hold seats. The official Labor Party denounced it. Leader of the Conservative group was, of course, Stanley Baldwin. Last week preparing for many long cabinet meetings (and just possibly to suggest to reporters his expectations of moving permanently into No. 10 Downing St. after the next elections), he arrived at the Prime Minister’s residence with an extra suit over one arm, an extra hat, a toothbrush and a jar of tobacco in the other. No. 2 Conservative was not swashbuckling Winston Churchill, who was not even mentioned in the papers last week, nor was it Baldwin’s former Foreign Secretary Sir Austen Chamberlain, but Sir Austen’s younger brother Neville. All the years that Sir Austen with his beakish nose and his monocle flared in the headlines. Brother Neville was an earnest, hard-working M. P. He became one of Stanley Baldwin’s most intimate friends, a member of the Conservative Board of Strategy.

Before the Labor Cabinet fell it was not Austen but Neville Chamberlain who went to Downing Street conferences with Baldwin. Last week he descended from the indefinite clouds of the strategy board into his old job in the Ministry of Health. His influence in the Cabinet steadily increased. Sir Austen Chamberlain, First Lord of the Admiralty, was reported over the week-end lunching near Juan Les Pins with New York’s pinchbeck Mayor James John Walker.

H. M’s Opposition. Meanwhile the Laborites, deserting Ramsay MacDonald because of his stand on the Dole, had a new chief and became His Majesty’s Opposition. Chunky “Uncle Arthur” Henderson was the leader. Assisted by John Robert Clynes and other serious Socialists with loose collars, thick-soled boots and cotton umbrellas, who felt that Mac-Donald had irretrievably sold out to the capitalists, he piped the party away from Ramsay. It was not the first time. During the War, when Scot MacDonald was expelled from his golf club because of his honest pacifism, Uncle Arthur took the Laborite leadership away from him.

As leaders of the Opposition Uncle Arthur and his Laborites were busy last week figuring an alternative scheme of their own to balance the budget. Searching frantically for something, anything, to save their sancrosanct Dole, they struck a nugget.

Mobilized Securities, Britons have about $20,000,000,000 invested abroad. From the Laborites’ point of view, the thing to do is to “mobilize foreign securities,” possibly by imposing a heavy tax on income from foreign investments. As a matter of fact a number of public-spirited British corporations mobilized their foreign securities voluntarily last week. Led by London Prudential Assurance Co. they offered the Government nearly $500,000,000 in U. S. and other foreign securities, as collateral for the new $400,000,000 Franco-U. S. loan.

Lord Lossiemouth? Laborites turned savagely on their outcast leader last week. His constituency of Seaham Harbor demanded his resignation as their representative. Scot MacDonald wrote a letter explaining his position:

“. . . We either had to face the question of how to avoid this crisis or allow it to come upon us and shatter us. … But it is a long story and I want to tell you and assure the executive committee that a small cut in unemployed pay is now absolutely necessary in order to keep the unemployment pay going at all.

“Remember this also, that since 1929 the cost of living has gone down 11½%, so if a request is made to cut 10% the unemployed will still be in a better position than only two years ago.

“I profoundly regret what has happened and if I can save you all in the long run I should cheerfully accept any sacrifice in doing it. It is the War over again.”

Leader MacDonald was not the only one to suffer. His faithful James Henry (“Jim”) Thomas was asked to resign either from the National Government or from his beloved National Union of Railwaymen. Trembling with emotion Jim Thomas wrote:

“To comply would brand me as a coward and a cad. . . . My resignation is the most painful task of my life, I having started as an engine cleaner at the age of eleven. Although my action may be misunderstood, time will justify it. Goodbye.”

Ramsay MacDonald cannot remain Prime Minister of Great Britain unless he is in Parliament. If the Laborites will not have him, the House of Lords is his only hope. His former friends were not only denying him last week, they were forcing him into the aristocracy. In London it was freely predicted that both Ramsay MacDonald and acidulous little Philip Snowden would be given peerages before the year’s end.

“Thank God for Him.” If the Laborites turned from him lust week, there were thousands of good British citizens who were prouder of their Prime Minister last week than they had ever been. James Louis Garvin, editor of The Observer (and the Encyclopaedia Britannica) is seldom given to exuberance. Last week he wrote of James Ramsay MacDonald:

“With his eyes wide open to risks as extreme as any national leader ever yet ran in time of peace … he staked his all, the leadership of his party, his whole career, his political life and associations dearer . . . than his personal life. We sav ‘Thank God for him!'”