IN AND OUT OF OFFICE

Otago Daily Times, Issue 26749, 19 April 1948, Page 5

IN AND OUT OF OFFICE

“THE GROWING STORM”

The Baldwin-MacDonald Regimes

By WINSTON S. CHURCHILL.

During the year 1922 a new leader arose in Britain. Mr Stanley Baldwin had been unknown or unnoticed in the world drama and played a modest part in domestic affairs. He had been Financial Secretary to the Treasury during the war and was at this time President of the Board of Trade. He became the ruling force in British politics from October, 1922, when he ousted Mr Lloyd George, until June, 1936, when, loaded with honours and enshrined in public esteem, he laid down his heavy task and retired in dignity and silence to his Worcestershire home. My relations with this statesman are a definite part of the tale I have to tell. Our differences at times were serious, but all these years and later I never had an unpleasant personal interview or contact with him, and at no time did I feel we could not talk together in good faith and understanding as man to man.

In 1923 began that period of 13 years which may well be called “The Baldwin-MacDonald Regime.” During all that time Mr Baldwin was always either at the head of the Government or Leader of the Opposition, and as Mr MacDonald never obtained an independent majority, Mr Baldwin, whether in office or opposition, was the ruling political figure in Britain. At first in alternation but eventually in political brotherhood, these two statesmen governed the country. Nominally- the representatives of opposing parties, of contrary doctrines, of antagonistic interests, they proved in fact to be more nearly akin in outlook, temperament and method than any other two men who had been Prime Ministers since that office was known to the Constitution. Curiously enough, the sympathies of each extended far into the territory of the other. Ramsay MacDonald nursed many of the sentiments of the old Tory. Stanley Baldwin, apart from a manufacturer's ingrained approval of Protection, was by disposition a truer representative of mild Socialism than many to be found in the Labour ranks. I Become a Conservative In 1924 there was another general election—the third in less than two years. The Conservatives were returned by a majority of 222 over all other parties combined (Conservatives 413. Liberal 40. Labour 151). At the beginning of this election Mr Baldv in’s position was very weak, and lie made no particular contribution to the result. He had, however, previously maintained himself as party leader, and as the results were declared it became certain he would become again Prime Minister. He retired to his home to form his second Administration.

At this time I stood fairly high in Tory popularity. At the Westminster by-election six months before I proved my hold upon Conservative forces. Although I stood as a Liberal, grea. numbers of Tories worked and voted for me. I was defeated by only 43 votes out of 20,000 cast. At the general election I was returned for Eppmg by a 10,000 majority, but as a * Constitutionalist.” I would not at that time adopt the name “Conservative. I was surprised, and the Conservative Party dumbfounded, when Mr Ba dwin invited me to become Chancellor of the Exchequer, the office which my father had once held. A year later, with the approval of my constituents, not having been pressed personally m any way, I formally rejoined the Conservative Party and the Carlton Club, which I had left 20 years before. Mv first ouestion at the Treasury of an international character was the American debt. At the end of the war the European Allies owed the United States about 10,000,000,000 dollars, of which 4,000,000,000 were owed by Britain. On the other hand. we.were owed by the otter Allies principally by Russia, 7,000,000,000 dollars. In 1920 Britain had proposed an alhround cancellation of war debts. This involved, on paper at least, a sacrifice by us f about £750,000,000 sterling.. As the value of money has halved since then, the figures could in fact be doubled No settlement was reached. Un August 1, 1922, in Mr Lloyd George day the Balfour Note had declared that Great Britain would collect no more from her debtors— ally or fon ™; r enemy-than the United States collected from her This was a worthy statement. In December of }922a British delegation under Mr Baldwin Chancellor of the Exchequer in Mi Bonar Law’s Government, visited Washington, and as the result Brita.n agreed to pay the whole of her wai dfbfto The" Jnited States at a rate of interest reduced from 5 to 3i per cent., irrespective of receipts from her debtors. British Reparations This agreement caused deep concern in many instructed quarters, and no one more than the Prime Minister himself. It imposed . upon Great Britain, much impoverished by the war in which, as she was to do once again, she had fought from the first day to the last, the payment of £35,000,006 a year for 62 years. The basis of this agreement was considered, not only in this island, but by many disinterested financial authorities in America, to be a severe and improvident condition for both borrower and lender. The enforcement of the BaldwmCoolidge debt settlement is a recognisable factor in the economic collapse which was presently to overwhelm the world, to prevent its recovery and inflame its hatreds. The service of the American debt was particularly difficult to render to a country which had newly raised its tariffs to even higher limits, and had already buried in its vaults nearly all the gold yet dug up. Similar but lighter settlements were imposed upon the other European Allies. The first result was that everyone put tiie sciew on Germany. I was in full accord with the policy of the Balfour Note of 1922, and had argued for it at the time; and when I became Chancellor of the Exchequer I reiterated it, and acted accordingly. I thought that if Great Britain were thus made not only the debtor, but the debt-collector of the United States, the unwisdom of the debt collection would become apparent at Washington. However, no such reaction followed. Indeed, the argument was resented. The United States continued to insist upon its annual inpayments from Great Britain. It therefore foil to me to make settlements with all our allies, so that added to the German payments which we had already scaled down, we could reduce the 35,000,000 annually for the American Treasury. Severest pressure was put upon Germany, and a vexatious' regime of international control of German internal affans was imposed. ' The United States received from England three payments in full and these were extorted from Germany by indemnities on the modified Dawes scale.

The Locarno Pact In February, 1925, the German Government had addressed itself to M. Herriot then French Premier. Their memorandum stated that Germany was willing to declare her acceptance of a pact by virtue of which the Powers interested in the Rhine, above all, England, France, Italy and Germany, would enter into a solemn obligation for a lengthy period towards the Government of the United States as trustees. not to wage war against a contracting State. Furthermore, a pact expressly guaranteeing the existing territorial status on the Rhine would be acceptable to Germany. This was a remarkable event. The French Goyernment undertook to consult their allies. After consultation between London and Paris a formal Note was handed to Herr Stressmann by the French Ambassador in Berlin on June 16, 1925. The Note declared that no agreement could be reached unless

as a prior condition Germany entered the League of Nations. There could be no suggestion in any proposed agreement of a modification of the conditions of the Peace Treaty. Belgium must be included among the contracting Powers; and finally- the natural complement of a Rhineland Pact would be a Franco-German Arbitration Treaty. The British attitude was debated in the House of Commons on June 24. To me the aim of ending the 1000year strife between France and Germany seemed a supreme object. If we could only weave Gaul and Teuton so closely together economically, socially and morally as to prevent the occasion of new quarrels, and make old antagonisms die in the realisation of mutual prosperity and interdependence, Europe would rise again. It seemed to me that the supreme Interest of the British people in Europe lay in the assuagement of the Franco-German feud, and that they had no other interests comparable or contrary to that. This is still my view to-day. In July the Germans replied to the Freifch Note, accepting the linking up of a Western pact with the entry of Germany into the League of Nations, but stating the prior need for agreement upon general disarmament. In August the French, with the full agreement of Great Britain, replied officially to Germany. Germany must enter the League without reservations as the first and indispensable step. The German Government accepted this stipulation. On this basis the conference at Locarno was formally opened on October 4. By the waters of this calm lake, the delegates of Britain, France, Germany, Belgium and Italy assembled. The conference achieved: First, the Treaty of Mutual Guarantees between the five Powers; secondly, arbitration treaties between Germany and France, Germany and Belgium, Germany and Poland, Germany and Czechoslovakia; thirdly, special agreements between France and Poland, and France and Czechoslovakia, by which France undertook to afford them assistance if a breakdown of the Western pact were followed by an unprovoked resort to arms. Thus did the Western European democracies agree to keep the peace among themselves in all circumstances, and to stand united against any one of their number who broke the contract and marched in aggression upon a brother land. As between France and Germany, Great Britain became solemnly pledged to come to the aid of whichever of the other two States was the object of unprovoked aggression. This far-reaching military commitment was accepted by Parliament and endorsed warmly by the nation. The histories may be searched in vain for a parallel to such an undertaking. My own view about this two-way guarantee was that while France remained armed and Germany disarmed, Germany could not attack her; and that, on the other hand, France would never attack Germany if that automatically involved Britain becoming Germany's ally. Thus, although the proposal seemed dangerous in theory —pledging us in fact to take part on one side or the other in any FrancoGerman war that might arise—-there was little likelihood of such a disaster ever coming to pass; and this was the best means of preventing it. I was, therefore, always equally opposed to the disarmament of France and to the rearmament of Germany, because of the much greater danger this immediately brought on Great Britain. Second Labour Government The general election of May, 1929, showed that the “swing of the pendulum ” and the normal desire for change were powerful factors with the British electorate. The Conservatives were the largest party in the new House of Commons, but the Liberals, with 100 seats, held the balance, and it was plain that under Mr Lloyd George’s leadership they would, at the outset at least, be hostile to the Conservatives. Mr Baldwin and I were in full agreement that we should not seek to hold office in a minority or on precarious Liberal support. Accordingly, atthough there were some differences of opinion in the Cabinet and the party about the course to be taken, Mr Baldwin tendered his resignation to the King. We all went down to Windsor in a saloon to give up our Seals and Offices, and on June 7 Mr Ramsay MacDonald became for the second time Prime Minister at the head of a minority Government depending upon Liberal votes. . The Socialist Prime Minister wished his new Labour Government to distinguish itself by larger concessions to Egypt, by a far-reaching constitutional change in India, and by a renewed effort for world, or at any rate British, disarmament. These were aims in which he could count upon Liberal aid, and for which he. therefore, commanded a parliamentary majority. Here again my differences with Mr Baldwin, and thereafter the relationship in which we had worked since he chose me for Chancellor of the Exchequer five years before, became sensibly altered. We still, of course, remained in easy personal contact, but we knew we did not mean the same thing. It was on India that our definite breach occurred. The Prime Minister, strongly supported and even spurred by the Conservative Viceroy, Lord Irwin, afterward Lord Halifax, pressed forward with his plan of Indian self-government. A portentous conference was held in London, of which Mr Gandhi, lately released from commodious internment, was the central figure. There is no need to follow in these pages the details of the controversy which occupied the sessions of 1929 and 1930. On the release of Mr Gandhi from his internment in order that he might become the envoy of Nationalist India to the London Conference, I reached the breaking point in my relations with Mr Baldwin. He seemed quite content with these developments, was in general accord with the Prime Minister and the Viceroy; and led the Conservative Opposition decidedly along this path. I felt sure we should lose India in the final result, and that measureless disasters would come upon the Indian peoples. I therefore, after a while, resigned from the Shadow Cabinet upon this issue.

The Crash The year 1929 reached almost the end of its third quarter under the promise and appearance of increasing prosperity, particularly in the United States. But in October a sudden and violent tempest swept over Wall street The intervention of the most powerful agencies failed to stem the tide of panic sales. A group of leading banks continued a milliard-dollar pool to maintain and stabilise the market. All was vain. The whole wealth so swiftly gathered in the paper values of previous years vanished. The prosperity of millions of American homes had grown upon a gigantic structure of inflated credit, now suddenly proved phantom. The means of exchange of goods and services between man and man was smitten to the ground: and the crash on Wall Street reverberated in modest and rich households alike. The consequences of this dislocation of economic life became world-wide. A general contraction of trade in the face of unemployment and declining production followed. Tariff restrictions were imposed to protect the home markets. The general crisis brought with it acute monetary difficulties, and paralysed internal credit. This spread ruin and unemployment far and wide throughout the globe. Mr MacDonald’s Government, with all their promises behind them, saw unemployment during 1930 and 1931 bound up in their faces from one million to nearly three millions.

It is almost difficult for an Administration or party which is founded upon attacking capital, to preserve the

confidence and credit so important to the highly artificial economy of an island like Britain. Mr MacDonald’s Labour-Socialist Government were utterly unable to cope with the problems which confronted them. The failure of the Labour Party to face this tempest, the sudden collapse of British financial credit and the break-up of the Liberal Party, with its unwholesome balancing power led to a National Coalition. It seemed that only a Government of all parties was capable of coping with the crisis. Like many others, I had felt the need of a national concentration. But I was neither surprised nor unhappy when I was left out of it. Indeed, I remained painting at Cannes while the political crisis lasted. I had had 15 years of Cabinet office, and was now busy with my “ Life of Marlborough.’’ Political dramas are very exciting at the time to those engaged in the clatter and whirlpool of politics, but I can truthfully affirm that I never felt resentment, still less pain, at being so decisively discarded in a moment of national stress. (World Copyright Reserved.)