Friday, 25 October 2019

The first Labour Government December 6th 1923 election

 

1923 General Election

Andrew Bonar Law, the leader of the Conservative Party, replaced David Lloyd George as prime minister. His first task was to persuade the French government to be more understanding of Germany's ability to pay war reparations. Under the terms of the Treaty of Versailles (1919), agreed to 226 billion gold marks. In 1921, the amount was reduced to 132 billion. However, they were still unable to pay the full amount and by the end of 1922, Germany was deeply in debt. Bonar Law suggested lowering the payments but the French refused and on 11th January, 1923, the French Army occupied the Ruhr. (1) Bonar Law also had the problem of Britain's war debt to the United States. In January 1923 Bonar Law's chancellor, Stanley Baldwin, sailed to America to discuss a settlement. Initially the loans to Britain had been made at an interest rate of 5 per cent. Bonar Law urged Baldwin to get it reduced to 2.5 per cent, but the best American offer was for 3 per cent, rising to 3.5 per cent after ten years. This amounted to annual repayments of £25 million and £36 million, rising to £40 million. Baldwin, acting on his own initiative, accepted the American offer and announced to the British press that they were the best terms available. Bonar Law was furious and on 30th January announced at cabinet that he would resign rather than accept the settlement. However, the rest of the cabinet thought it was a good deal and he was forced to withdraw his threat. (2)
The American settlement meant a 4 per cent increase in public expenditure at a time when Bonar Law was committed to a policy of reducing taxes and public expenditure. This brought him into conflict with the trade union movement that was deeply concerned by growing unemployment. Robert Blake, the author of The Conservative Party from Peel to Churchill (1970) argued that Bonar Law was not sure how the working class would react to this situation. Could they gain their support "by making moderate concessions" or to make "a direct appeal to the working-class over the heads of the bourgeoisie, a new form of Tory radicalism?" (3)
In April 1923, Bonar Law began to have problems talking. On the advice of his doctor, Sir Thomas Horder, he took a month's break from work, leaving Lord George Curzon to preside over the cabinet and Stanley Baldwin to lead in the House of Commons. Horder examined Bonar Law in Paris on 17th May, and diagnosed him to be suffering from cancer of the throat, and gave him six months to live. Five days later Bonar Law resigned but decided against nominating a successor. (4)
John C. Davidson, the Conservative Party MP, sent a memorandum to King George V advising him on the appointment: "The resignation of the Prime Minister makes it necessary for the Crown to exercise its prerogative in the choice of Mr Bonar Law's successor. There appear to be only two possible alternatives. Mr Stanley Baldwin and Lord Curzon. The case for each is very strong. Lord Curzon has, during a long life, held high office almost continuously and is therefore possessed of wide experience of government. His industry and mental equipment are of the highest order. His grasp of the international situation is great."
Davidson pointed out that Baldwin also had certain advantages: "Stanley Baldwin has had a very rapid promotion and has by his gathering strength exceeded the expectations of his most fervent friends. He is much liked by all shades of political opinion in the House of Commons, and has the complete confidence of the City and the commercial world generally. He in fact typifies the spirit of the Government which the people of this country elected last autumn and also the same characteristics which won the people's confidence in Mr Bonar Law, i.e. honesty, simplicity and balance."
Given their relative merits, Davidson believed that the king should select Baldwin: "Lord Curzon temperamentally does not inspire complete confidence in his colleagues, either as to his judgement or as to his ultimate strength of purpose in a crisis. His methods too are inappropriate to harmony. The prospect of him receiving deputations as Prime Minister for the Miners' Federation or the Triple Alliance, for example, is capable of causing alarm for the future relations between the Government and labour, between moderate and less moderate opinion... The time, in the opinion of many members of the House of Commons, has passed when the direction of domestic policy can be placed outside the House of Commons, and it is admitted that although foreign and imperial affairs are of vital importance, stability at home must be the basic consideration. There is also the fact that Lord Curzon is regarded in the public eye as representing that section of privileged conservatism which has its value, but which in this democratic age cannot be too assiduously exploited." (5)
Arthur Balfour, the prime minister between July, 1902 and December, 1905, was also consulted and he suggested the king could chose Baldwin. (6) "Balfour... pointed out that a Cabinet already over-weighted with peers would be open to even greater criticism if one of them actually became Prime Minister; that, since the Parliament Act of 1911, the political centre of gravity had moved more definitely than ever to the Lower House; and finally that the official Opposition, the Labour party, was not represented at all in the House of Lords." (7)
Andrew Bonar Law was the shortest-serving prime minister of the 20th century. He is also the only British prime minister to be born outside the British Isles. Bonar Law died aged 65, on 30th October, 1923. His estate was probated at £35,736 (approximately £1,900,000 as of 2017). (8)
Stanley Baldwin was faced with growing economic problems. This included a high-level of unemployment. Baldwin believed that protectionist tariffs would revive industry and employment. However, Bonar Law had pledged in 1922 that there would be no changes in tariffs in the present parliament. Baldwin came to the conclusion that he needed a General Election to unite his party behind this new policy. On 12th November, Baldwin asked the king to dissolve parliament. (9)



Junior Imperial League Gazette (December, 1923)
Junior Imperial League Gazette (December, 1923)
During the election campaign, Baldwin made it clear that he intended to impose tariffs on some imported goods: "What we propose to do for the assistance of employment in industry, if the nation approves, is to impose duties on imported manufactured goods, with the following objects: (i) to raise revenue by methods less unfair to our own home production which at present bears the whole burden of local and national taxation, including the cost of relieving unemployment; (ii) to give special assistance to industries which are suffering under unfair foreign competition; (iii) to utilise these duties in order to negotiate for a reduction of foreign tariffs in those directions which would most benefit our export trade; (iv) to give substantial preference to the Empire on the whole range of our duties with a view to promoting the continued extension of the principle of mutual preference which has already done so much for the expansion of our trade, and the development, in co-operation with the other Governments of the Empire, of the boundless resources of our common heritage." (10) The Labour Party election manifesto completely rejected this argument: "The Labour Party challenges the Tariff policy and the whole conception of economic relations underlying it. Tariffs are not a remedy for Unemployment. They are an impediment to the free interchange of goods and services upon which civilised society rests. They foster a spirit of profiteering, materialism and selfishness, poison the life of nations, lead to corruption in politics, promote trusts and monopolies, and impoverish the people. They perpetuate inequalities in the distribution of the world's wealth won by the labour of hands and brain. These inequalities the Labour Party means to remove." (11)
In the 1923 General Election, the Labour Party won 191 seats. Although the Conservative Party had 258 seats, Herbert Asquith announced that the Liberal Party would not keep the Tories in office. If a Labour Government were ever to be tried in Britain, he declared, "it could hardly be tried under safer conditions". On 22nd January, 1924 Stanley Baldwin resigned. At midday, the 57 year-old, Ramsay MacDonald went to Buckingham Palace to be appointed prime minister. He later recalled how George V complained about the singing of the Red Flag and the La Marseilles, at the Labour Party meeting in the Albert Hall a few days before. MacDonald apologized but claimed that there would have been a riot if he had tried to stop it. (12)



 
Political PartiesTotal Votes%MPs
Conservative Party 5,514,541 38.0 258
Liberal Party 4,301,481 29.7 158
Labour Party 4,439,780 30.7 191
Communist Party 39,448 0.2 0
Irish Nationalists 97,993 0.4 3









Primary Sources

(1) John C. Davidson, Conservative Party member of the House of Commons, memorandum sent to Arthur Bigge, 1st Baron Stamfordham, private secretary of King George V (22nd May, 1923)

The resignation of the Prime Minister makes it necessary for the Crown to exercise its prerogative in the choice of Mr Bonar Law's successor. There appear to be only two possible alternatives. Mr Stanley Baldwin and Lord Curzon. The case for each is very strong.
Lord Curzon has, during a long life, held high office almost continuously and is therefore possessed of wide experience of government. His industry and mental equipment are of the highest order. His grasp of the international situation is great.
Mr Stanley Baldwin has had a very rapid promotion and has by his gathering strength exceeded the expectations of his most fervent friends. He is much liked by all shades of political opinion in the House of Commons, and has the complete confidence of the City and the commercial world generally. He in fact typifies the spirit of the Government which the people of this country elected last autumn and also the same characteristics which won the people's confidence in Mr Bonar Law, i.e. honesty, simplicity and balance. There is however a disadvantage that, compared to many of his colleagues, his official life is short. On the other hand there can be no doubt that Lord Curzon temperamentally does not inspire complete confidence in his colleagues, either as to his judgement or as to his ultimate strength of purpose in a crisis. His methods too are inappropriate to harmony. The prospect of him receiving deputations as Prime Minister for the Miners' Federation or the Triple Alliance, for example, is capable of causing alarm for the future relations between the Government and labour, between moderate and less moderate opinion. The choice in fact seems to be in recognizing in an individual those services which in Lord Curzon's case enable him to act as Deputy Prime Minister, but which as is so often the case when larger issues are involved might not qualify him in the permanent post. The time, in the opinion of many members of the House of Commons, has passed when the direction of domestic policy can be placed outside the House of Commons, and it is admitted that although foreign and imperial affairs are of vital importance, stability at home must be the basic consideration. There is also the fact that Lord Curzon is regarded in the public eye as representing that section of privileged conservatism which has its value, but which in this democratic age cannot be too assiduously exploited.
The number of peers holding the highest offices in the Government, that is four out of the five Secretaries of State, has already produced comment, even among Conservatives. The situation in this respect will be accentuated by placing the direction of Government policy in the Upper House. For any further subordination of the House of Commons will be most strongly resented, not only by the Conservative Party as a whole, but by every shade of democratic opinion in the country. It is thought that the truth of this view finds support in the fact that whereas it would be most unlikely that Lord Curzon could form a government without the inclusion of the present Chancellor of the Exchequer, on the other hand it would clearly be possible for Mr Baldwin to form a government even though Lord Curzon should find himself unable to join it.

(2) Conservative Party Manifesto for the 1923 General Election (November, 1923)

In submitting myself to you for re-election, I propose frankly to put before you the present situation as I see it, and the measures which in the opinion of myself and my colleagues are necessary adequately to deal with it.
1. The unemployment and under-employment which our working people and our great national industries are now facing for the fourth winter in succession, on a scale unparalleled in our history, have created a problem which calls urgently for a solution. Their indefinite continuance threatens to impair permanently the trained skill and the independent spirit of our workers, to disorganise the whole fabric of industry and credit, and, by eating away the sources of revenue, to undermine the very foundations of our national and municipal life.
2. In large measure this state of affairs is due to the political and economic disorganisation of Europe consequent on the Great War. In accordance with the policy affirmed by the Imperial Conference we shall continue to devote every effort through the League of Nations and by every other practical means, to the restoration of a true peace in Europe. But that at the best must take time. A year ago Mr. Bonar Law could still hope that a more settled condition of affairs was in prospect, and that with it trade might enjoy a substantial and steady revival, even in the absence of any modification of fiscal policy, of the ultimate necessity of which he himself was always convinced. Since the occupation of the Ruhr it has become evident that we are confronted by a situation which, even if it does not become worse, is not likely to be normal for years to come.
3. The disorganisation and poverty of Europe, accompanied by broken exchanges and by higher tariffs all the world over, have directly and indirectly narrowed the whole field of our foreign trade. In our own home market the bounty given to the importation of foreign goods by depreciated currencies, and by the reduced standard of living in many European countries, has exposed us to a competition which is essentially unfair and is paralysing enterprise and initiative. It is under such conditions that we have to find work for a population which, largely owing to the cessation during the war period of the normal flow of migration to the Dominions, has in the last census period increased by over a million and three quarter souls.
4. No Government with any sense of responsibility could continue to sit with tied hands watching the unequal struggle of our industries or content itself with palliatives which, valuable as they are to mitigate the hardship to individuals, must inevitably add to the burden of rates and taxes and thereby still further weaken our whole economic structure. Drastic measures have become necessary for dealing with present conditions as long as they continue.
5. The present Government hold themselves pledged by Mr. Bonar Law not to make any fundamental change in the fiscal system of the country without consulting the electorate. Convinced, as I am, that only by such a change can a remedy be found, and that no partial measures such as the extension of the Safeguarding of Industries Act, can meet the situation, I am in honour bound to ask the people to release us from this pledge without further prejudicing the situation by any delay. That is the reason, and the only reason, which has made this election necessary.
6. What we propose to do for the assistance of employment in industry, if the nation approves, is to impose duties on imported manufactured goods, with the following objects: -
(i) to raise revenue by methods less unfair to our own home production which at present bears the whole burden of local and national taxation, including the cost of relieving unemployment;
(ii) to give special assistance to industries which are suffering under unfair foreign competition;
(iii) to utilise these duties in order to negotiate for a reduction of foreign tariffs in those directions which would most benefit our export trade;
(iv) to give substantial preference to the Empire on the whole range of our duties with a view to promoting the continued extension of the principle of mutual preference which has already done so much for the expansion of our trade, and the development, in co-operation with the other Governments of the Empire, of the boundless resources of our common heritage.
7. Such a policy will defend our industries during the present emergency and will enable us, as more normal conditions return, to work effectively to secure a greater measure of real Free Trade both within the Empire and with foreign countries. Trade which is subject to the arbitrary interference of every foreign tariff, and at the mercy of every disturbance arising from the distractions of Europe, is in no sense free, and is certainly not fair to our own people.
8. It is not our intention, in any circumstances, to impose any duties on wheat, flour, oats, meat (including bacon and ham), cheese, butter or eggs.
9. While assisting the manufacturing industries of the country we propose also to give a direct measure of support to agriculture. Agriculture is not only, in itself, the greatest and most important of our national industries, but is of especial value as supplying the most stable and essentially complementary home market for our manufactures.
10. We propose to afford this assistance by a bounty of £1 an acre on all holdings of arable land exceeding one acre. The main object of that bounty is to maintain employment on the land and so keep up the wages of agricultural labour. In order to make sure of this we shall decline to pay the bounty to any employer who pays less than 30/- a week to an ablebodied labourer.
11. The exclusion from any import duties of the essential foodstuffs which I have mentioned, as well as of raw materials, undoubtedly imposes a certain limitation upon the fullest extension of Imperial Preference. But even the preferences agreed to at the recent Economic Conference within our existing fiscal system, have been acknowledged as of the greatest value by the Dominion representatives, and our present proposals will offer a much wider field, the value of which will be progressively enhanced by the increasing range and variety of Empire production.
12. Moreover in the field of Empire development, as well as in that of home agriculture, we are not confined to the assistance furnished by duties. We have already given an earnest of our desire to promote a better distribution of the population of the Empire through the Empire Settlement Act, and at the Economic Conference we have undertaken to co-operate effectively with the Government of any part of the Empire in schemes of economic develop ment. More especially do we intend to devote our attention to the development of cotton growing within the Empire, in order to keep down the cost of a raw material essential to our greatest exporting industry.
13. These measures constitute a single comprehensive and inter-dependent policy. Without additional revenue we cannot assist agriculture at home, but the income derived from the tariff will provide for this and leave us with means which can be devoted to cotton growing and other development in the Empire, and to the reduction of the duties on tea and sugar which fall so directly upon the working class household.
14. For the present emergency, and pending the introduction of our more extended proposals, we are making, and shall continue to make, every effort to increase the volume of work for our people. The Government are spending very large sums on every measure of emergency relief that can help in this direction. Further, the Local Authorities of all kinds throughout the country, and great individual enterprises, such as the railways, with the assistance of the Government, or on its invitation, are co-operating whole-heartedly in the national endeavour to increase the volume of employment. This great combined effort of the Government, of the Local Authorities, and of individual enterprises, represents an expenditure of no less than'100 millions sterling.
15. The position of shipbuilding, one of the hardest hit of all our industries, is peculiar. It can only recover as shipping revives with the development of Empire and foreign trade which we believe will follow from our measures. We propose in the meantime to give it special assistance by accelerating the programme of light cruiser construction which will in any case become necessary in the near future. We are informed by our Naval advisers that some 17 light cruisers will be required during the next few years in replacement of the County class, as well as a variety of smaller and auxiliary craft, and we intend that a substantial proportion of these shall be laid down as soon as the designs are ready and Parliamentary sanction secured.
16. The solution of the unemployment problem is the key to every necessary social reform. But I should like to repeat my conviction that we should aim at the reorganisation of our various schemes of insurance against old age, ill-health and unemployment. More particularly should we devote our attention to investigating the possibilities of getting rid of the inconsistencies and the discouragement of thrift at present associated with the working of the Old Age Pensions Act. The encouragement of thrift and independence must be the underlying principle of all our social reforms.

(3) Robert Blake, The Conservative Party from Peel to Churchill (1970)

The king decided for Baldwin, and everything suggests that he was influenced above all else by the fact that Curzon was a peer. His strong inclination to keep the premiership in the Commons was heavily reinforced by the advice of Balfour whom he consulted as an ex-Tory Prime Minister and the leading elder statesman of the party... We know that he privately had long regarded Curzon with a mixture of dislike and contempt. He was, however, careful to say nothing personally detrimental. He merely pointed out that a Cabinet already over-weighted with peers would be open to even greater criticism if one of them actually became Prime Minister; that, since the Parliament Act of 1911, the political centre of gravity had moved more definitely than ever to the Lower House; and finally that the official Opposition, the Labour party, was not represented at all in the House of Lords.

(4) Labour Party Manifesto for the 1923 General Election (November, 1923)

After a year of barren effort, the Conservative Government has admitted its inability to cope with the problem of Unemployment, and is seeking to cover up its failure by putting the nation to the trouble and expense of an election on the Tariff issue.
TARIFFS NO REMEDY
The Labour Party challenges the Tariff policy and the whole conception of economic relations underlying it. Tariffs are not a remedy for Unemployment. They are an impediment to the free interchange of goods and services upon which civilised society rests. They foster a spirit of profiteering, materialism and selfishness, poison the life of nations, lead to corruption in politics, promote trusts and monopolies, and impoverish the people. They perpetuate inequalities in the distribution of the world's wealth won by the labour of hands and brain. These inequalities the Labour Party means to remove.
WORK OR MAINTENANCE
Unemployment is a recurrent feature of the existing economic system, common to every industrialised country, irrespective of whether it has Protection or Free Trade. The Labour Party alone has a positive remedy for it. We denounce as wholly inadequate and belated the programme of winter work produced by the Government, which offers the prospect of employment for only a fraction of the unemployed in a few industries; and in particular provides no relief for women and young persons.
LABOUR'S UNEMPLOYMENT PROGRAMME
The Labour Party has urged the immediate adoption of national schemes of productive work, with adequate maintenance for those who cannot obtain employment to earn a livelihood for themselves and their families. The flow of young workers from the schools must be regulated to relieve the pressure on the labour market, and full educational training, with maintenance, must be provided for the young people who are now exposed to the perils and temptations of the streets.
The Labour Programme of National Work includes the establishment of a National System of Electrical Power Supply, the development of Transport by road, rail and canal, and the improvement of national resources by Land Drainage, Reclamation, Afforestation, Town Planning, and Housing Schemes. These not only provide a remedy for the present distress, but are also investments for the future.
HELP FOR AGRICULTURE
Agriculture, as the largest and most essential of the nation's industries, calls for special measures to restore its prosperity and to give the land workers a living wage. The Labour Policy is one that will develop Agriculture and raise the standard of rural life by establishing machinery for regulating wages with an assured minimum, providing Credit and State insurance facilities for Farmers and Smallholders, promoting and assisting Co-operative Methods in Production and Distribution, so as to help stabilise prices, and make the fullest use of the results of research.
THE LAND
The Labour Party proposes to restore to the people their lost rights in the Land, including Minerals, and to that end will work for re-equipping the Land Valuation Department, securing to the community the economic rent of land, and facilitating the acquisition of land for public use.
PEACE AMONG THE NATIONS
Labour's vision of an ordered world embraces the nations now torn with enmity and strife. It stands, therefore, for a policy of International Co-operation through a strengthened and enlarged League of Nations; the settlement of disputes by conciliation and judicial arbitration; the immediate calling by the British Government of an International Conference (including Germany on terms of equality) to deal with the Revision of the Versailles Treaty, especially Reparations and Debts; and the resumption of free economic and diplomatic relations with Russia. This will pave the way for Disarmament, the only security for the nations.
RELIEF FOR THE TAXPAYER
Labour condemns the failure of the Government to take steps to reduce the deadweight War Debt. No effective reform of the National Finances can be attempted until the steady drain of a million pounds a day in interest is stopped. Treasury experts, in evidence before a Select Committee of the House of Commons, expressed their view that a Tax on War Fortunes could be levied, and have therefore admitted both the principle and its practicability. A Labour Chancellor of the Exchequer, in consultation with Treasury experts, would at once work out a scheme to impose a non-recurring, graduated War Debt Redemption Levy on all individual fortunes in excess of £5,000, to be devoted solely to the reduction of the Debt.
The saving thus effected, with reduction of expenditure on armaments, other sane economies, and the increased revenue derived from Taxation of Land Values, would make it possible to reduce the burden of Income Tax, abolish not only the Food Duties, but also the Entertainments Tax and the Corporation Profits Tax, as well as provide money for necessary Social Services.
THE COMMONWEALTH OF CO-OPERATIVE SERVICE
The Labour Party is working for the creation of a Commonwealth of Co-operative Service. It believes that so far only a beginning has been made in the scientific organisation of industry. It will apply in a practical spirit the principle of Public Ownership and Control to the Mines, the Railway Service and the Electrical Power Stations, and the development of Municipal Services. It will make work safe for the worker by stricter Inspection of Workplaces, and more effective measures against Accidents and Industrial Diseases. It will provide fuller Compensation for the Workers and improve the Standard of Hours.
THE AGED, THE WIDOWS, THE CHILDREN
Labour Policy is directed to the creation of a humane and civilised society. When Labour rules it will take care that little children shall not needlessly die; it will give to every child equality of opportunity in Education; it will make generous provision for the aged people, the widowed mothers, the sick and disabled citizens.
It will abolish the slums, promptly build an adequate supply of decent homes and resist decontrol till the shortage is satisfied. It will place the Drink Traffic under popular control.
EX-SERVICE MEN'S PENSIONS
In accordance with its past actions inside and outside Parliament, the Labour Party will do its utmost to see that the Ex-Service men and their dependants have fair play.
EQUAL RIGHTS
Labour stands for equality between men and women: equal political and legal rights, equal rights and privileges in parenthood, equal pay for equal work.
LABOUR'S PRACTICAL IDEALISM
The Labour Party submits to the men and women of the country its full programme. It urges them to refuse to make this General Election a wretched partisan squabble about mean and huckstering policies. It appeals to all citizens to take a generous and courageous stand for right and justice, to believe in the possibility of building up a sane and ordered wants, to oppose the squalid materialism that dominates the world to-day, and to hold out their hands in friendship and good-will to the struggling people everywhere who want only freedom, security and a happier life.





References

(1) Conan Fischer, The Ruhr Crisis, 1923–1924 (2003) pages 28-31

(2) Ewen Green, Andrew Bonar Law : Oxford Dictionary of National Biography (2004-2014)

(3) Robert Blake, The Conservative Party from Peel to Churchill (1970) page 207

(4) Robert Blake, The Unknown Prime Minister: The Life and Times of Andrew Bonar Law (1955) page 516

(5) John C. Davidson, Conservative Party member of the House of Commons, memorandum sent to Arthur Bigge, 1st Baron Stamfordham, private secretary of King George V (22nd May, 1923)

(6) John C. Davidson, Memoirs of a Conservative (1969) page 157

(7) Robert Blake, The Conservative Party from Peel to Churchill (1970) page 213

(8) Ewen Green, Andrew Bonar Law : Oxford Dictionary of National Biography (2004-2014)

(9) Stanley Ball, Stanley Baldwin : Oxford Dictionary of National Biography (2004-2014)

(10) Conservative Party Manifesto (November, 1923)

(11) Labour Party Manifesto (November, 1923)

(12) Robert Shepherd, Westminster: A Biography: From Earliest Times to the Present Day (2012) page 313

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