Baldwin (7 page)

What he thought he needed was someone with the public fame to take over the leadership and to hold a candle to the great names of Lloyd George, Austen Chamberlain, Churchill, Birkenhead and Balfour. He could not at that stage hope to fulfil this rôle himself. There seemed only one man who could, and that was Bonar Law, his fragile health somewhat improved as a result of eighteen months out of the Government, and his loyalty to Lloyd George and Austen Chamberlain weakened by the same cause. The great issue of the next week was whether Law could agree to attend the Carlton Club meeting which Chamberlain had summoned at short notice for the Thursday morning, 19 October. Everything was held to depend on this. And when, as late as the Wednesday morning, Law announced that, as the doctors had passed him as fit for only two years,
he could not accept the rôle which attendance implied, the Baldwin forces were sunk in gloom.

It is difficult not to believe that they attached too much importance to Law’s availability. His reputation amongst Conservative Members of Parliament was high. But his advice was not in doubt, only whether he would lead the independent appeal to the country. No doubt his electoral leadership was of value; but can it have been of decisive importance? He was a sad knight in slightly drooping armour. Those who regarded his attendance as vital were probably taken in too much by the spirit of Birkenhead’s subsequent jibe about cabin boys taking over captains’ jobs. When captains become as distrusted as Lloyd George and Birkenhead himself, crews would rather see almost anyone else in charge.

In the event there was no test of what would have happened in Bonar Law’s absence. On the Wednesday evening he decided that he would attend. Thursday morning’s newspapers were dominated by this news, accompanied by that of the victory of an independent (i.e. anti-Coalition) Conservative candidate in a by-election at Newport. But Thursday morning’s meeting was dominated not by Law but by Baldwin. Austen Chamberlain began with a half-hour lecture on behalf of the majority of the Conservative members of the Cabinet. Baldwin spoke for eight minutes on behalf of the minority. It was a beautifully judged speech. He had to combat Chamberlain’s appeal for loyalty to his own leadership. He did it by counterposing the need for regard to the greater entity of the Conservative Party. He dealt extremely gently with Chamberlain, who was present and still respected, reserving the edge of his debating power entirely for Lloyd George, who was absent and distrusted:

[The Prime Minister] is a dynamic force, and it is from that very fact that our troubles, in our opinion, arise. A dynamic force is a very terrible thing; it may crush you but it is not necessarily right. It is owing to that dynamic
force, and that remarkable personality, that the Liberal Party, to which he formerly belonged, has been smashed to pieces; and it is my firm conviction that, in time, the same thing will happen to our party. I do not propose to elaborate, in an assembly like this, the dangers and the perils of that happening …. I think that if the present association is continued, and if this meeting agrees that it should be continued, you will see some more breaking up, and I believe the process must go on inevitably until the old Conservative Party is smashed to atoms and lost in ruins.

I would like to give you just one illustration to show what I mean by the disintegrating influence of a dynamic force. Take Mr Chamberlain and myself. Mr Chamberlain’s services to the State are infinitely greater than any I have been able to render, but we are both men who are giving all we can give to the service of the State; we are both men who are, or try to be, actuated by principle in our conduct; we are men who, I think, have exactly the same views on the political problems of the day; we are men who I believe -certainly on my side—have esteem and perhaps I may say affection for each other; but the result of this dynamic force is that we stand here today, he prepared to go into the wilderness if he should be compelled to forsake the Prime Minister, and I prepared to go into the wilderness if I should be compelled to stay with him. If that is the effect of that tremendous personality on two men occupying the position that we do, and related to each other in the way that Mr Chamberlain and I are, that process must go on throughout the party. It was for that reason that I took the stand I did, and put forward the views that I did. I do not know what the majority here or in the country may think about it. I said at the time what I thought was right, and I stick all through to what I believe to be right.

The effect was dramatic. Baldwin received an enthusiastic reception. It was the first of many speeches in which by the measured and skilful deployment of moderate words he visibly affected the opinions of a crucial audience. The debate proceeded. A motion to withdraw support from the Coalition was moved by a senior Essex backbencher.
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Bonar Law added a few effective but unremembered sentences at the end. The motion was then carried by 185 to 88.
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That afternoon Lloyd George resigned. Bonar Law waited to be confirmed as leader at a full Hotel Cecil party meeting on the Monday before accepting the King’s commission. His strength was as a representative figure, not as an ‘independent statesman’ like those whose advice had been swept aside at the Carlton Club, and he wished this to be underlined by a meticulous attention to proper procedure. This did not prevent his offering Baldwin the Exchequer before he had kissed hands. Baldwin undoubtedly wanted the job. He had done so four years before, and nothing had happened in the meantime either to abate his ambition or to make him less qualified—in the latter case very much the reverse. Furthermore, the offer could hardly have been a surprise to him. He had done more than anyone else to make the new Government.

Yet he declined. He suggested that Reginald McKenna,
Asquith’s last Chancellor, who was currently out of Parliament and chairman of the Midland Bank, should be approached instead. Law accepted the suggestion. McKenna took three days to consider the offer before refusing, nominally on health grounds. Law called on Baldwin with the news. Baldwin then accepted the post and was very pleased with himself. He went upstairs to his wife and said: ‘Treat me with respect; I am the Chancellor of the Exchequer.’

His
nolo episcopari
phase cannot be easily explained. At the end of the day he got exactly what he wanted—high office, achieved not merely without push but with a positive and recorded show of reluctance. Yet a cynical explanation does not stand up. He could not possibly have been confident that McKenna would refuse: the former Chancellor’s three days of hesitation is proof against this. It is difficult to reject the view that he was genuinely anxious, first not to appear to profit from his own actions in bringing about the downfall of the Coalition, and second to strengthen the new Government, which he thought, probably mistakenly, that McKenna would do.

The new Government needed strength, for without Austen Chamberlain, Balfour, Birkenhead or Horne it looked weak on paper, and it had to face an immediate general election. The result was a substantial triumph. The Conservatives won an overall majority of ninety, with the opposition split into three factions, but the Labour Party much stronger than either the Asquithian or the Lloyd George Liberals. Baldwin’s most notable contribution to the campaign was to exploit Lloyd George’s remark that Bonar Law was ‘honest to the verge of simplicity’. ‘By God,’ he commented, ‘that is what we have been looking for.’

The election won, Baldwin prepared to move, both into 11 Downing Street, which was his by right, and into Chequers, which Bonar Law did not want. Eaton Square was sold. It was a correct decision. He was to spend most of the next fourteen years in official residences.

Baldwin’s Chancellorship was notable principally for his American debt settlement. This was one of the most tangled of post-1918 issues. It involved the questions of reparations from Germany, Britain’s claims on her European allies, her credit in the United States, and the possibility of American help towards stabilisation in Europe—the German economy being sunk in inflationary disarray. Furthermore Baldwin had to negotiate against the background of a damaging partial commitment by the Coalition Government, including the elegantly drafted but
ill-judged Balfour note of July 1922, and an American public opinion which was inward-looking and brashly commercial. ‘They hired the money, didn’t they?’ was a simpler appeal than intricate arguments about Britain’s countervailing claims, the difference between a war debt and a normal commercial transaction, and the problems (however vividly exemplified by Germany) of making large payments across the exchanges without upsetting international trade. Still greater than these difficulties was Bonar Law’s stubborn (and in many ways sensible) resolve not to accept a massive continuing burden. He had said that he regarded all-round cancellation as the only fair solution to inter-Allied debts, and this remained his basic position throughout. Reluctantly, however, he authorised Baldwin to make a settlement which did not exceed a payment of £25 million a year.

Baldwin’s mission to Washington took him away from 27 December to 27 January. There were fluctuating negotiations, and some acerbity in the flow of telegrams from London. ‘Is it not possible that you are too much under the influence of Washington which is not even the New York atmosphere?’
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In spite of such warnings Baldwin’s desire for a settlement was fortified by the views of the Governor of the Bank of England, Montagu Norman,
who was with him, and of Auckland Geddes,
the ‘political’ Ambassador in Washington. Baldwin tabled proposals which involved payments of £34 million a year. The Americans countered by accepting this for the first ten years, but adding an extra ½ per cent interest, bringing the annual figure to £40 million for the remaining fifty-two years.

Baldwin thought the counter-offer acceptable, but as a rump Cabinet of the Prime Minister and six other members unanimously rejected it, he was forced to return with the matter unconcluded. At Southampton he made his own position devastatingly clear to the waiting journalists. He disclosed the terms of the American offer, he left no doubt that they were in his opinion the best that could be obtained and should be accepted, and he rounded things off with what were inter
preted as some highly uncomplimentary remarks about the quality of the Congressional opinion which had to be accommodated.

There then ensued one of the most extraordinary episodes in the history of British Cabinet government. There was no discussion between the Prime Minister and the Chancellor for two days. Then they together met the American Ambassador. Law denounced the proposed settlement. Baldwin remained silent. But he defended his attitude firmly at the Cabinet on the same day. The Prime Minister argued against him, and when opinion swung heavily in the Chancellor’s favour he indicated that he would resign rather than accept the settlement. An adjournment was then agreed to. The next morning (30 January)
The Times
carried an anonymous letter, rather quaintly signed ‘Colonial’, which repeated several of the arguments and phrases used by Law the previous afternoon. It was in fact written by the Prime Minister.