As things worked out, Great Britain was not ruined by the settlement of the American debt, though it was no doubt irksome that France and Italy later settled their debt on easier terms. Throughout the twenties the British collected a balancing amount from their own debtors and in reparations. The real harm lay elsewhere. While the settlement perhaps improved relations with the United States, it compelled the British to collect their own debts and therefore to insist on the payment of reparations by Germany both to others and to themselves. This was already clear in 1923. Poincare, now French premier, attempted to enforce the payment of reparations by occupying the Ruhr. The Germans took up passive resistance, the mark tumbled to nothing, the finances of central Europe were again in chaos. The British government protested and acquiesced. French troops were allowed to pass through the British zone of occupation in the Rhineland. While the British condemned Poincare's method, they could no longer dispute his aim: they were tied to the French claim at the same time as they opposed it.
The debt settlement might have been expected to turn Law against Baldwin. There were powerful factors on the other side. Law knew that Curzon was unpopular in the Conservative party—disliked both for his pompous arrogance and his weakness. Curzon lacked resolution, despite his rigid appearance. He was one of nature's rats. He ran away over the Parliament bill; he succumbed to women's suffrage. He promised to stand by Asquith and then abandoned him. He did the same with Lloyd George. Beaverbrook has called him 'a political jumping jack'. Law regarded the impending choice between Curzon and Baldwin with more than his usual gloom. He tried to escape from it by inviting Austen Chamberlain to join the government with the prospect of being his successor in the autumn. Chamberlain appreciated that his standing in the Conservative party had been for ever shaken by the vote at the Carlton club, and refused.
The end came abruptly. In May Law was found to have incurable cancer of the throat. He resigned at once. Consoled by the misleading precedent of what happened when Gladstone resigned in 1894, he made no recommendation as to his successor. He expected this to be Curzon, and was glad that it would be none of his doing. However, the king was led to believe, whether correctly or not, that Law favoured Baldwin, and he duly followed what he supposed to be the advice of his retiring prime minister as the monarch has done on all other occasions since 1894.3 Law lingered on until 30 October. He was buried in Westminster Abbey—the first prime minister to follow Gladstone there and with Neville Chamberlain, so far, as his only successor. The reason for this distinction is obscure. Was it because he had reunited the Conservative party? or because he had overthrown Lloyd George?
BALDWIN
Baldwin did not follow Law's example of waiting to accept office until he had been elected leader of the Conservative party. He became prime minister on 21 May, was elected leader on 28 May. Curzon proposed the election with phrases adequately fulsome. Privately he is reputed to have called Baldwin 'a man of the utmost insignificance'. This was Baldwin's strength. He seemed, though he was not, an ordinary man. He presented himself as a simple country gentleman, interested only in pigs. He was in fact a wealthy ironmaster, with distinguished literary connexions.2 His simple exterior concealed a skilful political operator. Lloyd George, after bitter experience, called him 'the most formidable antagonist whom I ever encountered'—no mean tribute. Baldwin played politics by ear. He read few official documents, the newspapers not at all. He sat on the treasury bench day after day, sniffing the order-paper, cracking his fingers, and studying the house of commons in its every mood. He had in his mind a picture, no doubt imaginary, of the patriarchal relations between masters and men at his father's steel works, and aspired to establish these relations with Labor on a national scale. This spirit met a response from the other side. MacDonald said of him as early as 1923: 'In all essentials, his outlook is very close to ours.' It is hard to decide whether Baldwin or MacDonald did more to fit Labor into constitutional life.
Baldwin did not set the Conservative pattern alone. He acquired, almost by accident, an associate from whom he was never parted: Neville Chamberlain.3 The two were yoke-fellows rather than partners, bound together by dislike of Lloyd George and by little else. Chamberlain was harsher than Baldwin, more impatient with criticism and with events. He antagonized where Baldwin conciliated. He was also more practical and eager to get things done. He had a zest for administrative reform. Nearly all the domestic achievements of Conservative governments between the wars stand to his credit, and most of the troubles also. Active Conservatives often strove to get rid of Baldwin and to put Chamberlain in his place. They did not succeed. Chamberlain sinned against Napoleon's rule: he was a man of No Luck. The cards always ran against him. He was humiliated by Lloyd George at the beginning of his political career, and cheated by Hitler at the end. Baldwin kept him in the second place, almost without trying.
Chamberlain's Housing Act (introduced in April, enacted in July) was the one solid work of this dull government. It was provoked by the complete stop in house building when Addison's programme ended. Chamberlain believed, like most people, that Addison's unlimited subsidies were the main cause of high building costs. He was also anxious, as a good Conservative, to show that private enterprise could do better than local authorities. His limited subsidy (Ј6 a year for twenty years) went to private and public builders alike, with a preference for the former; and they built houses only for sale. Mean houses ('non-parlour type' was the technical phrase) were built for those who could afford nothing better. Predominantly, the Chamberlain act benefited the lower middle class, not the industrial workers. This financial discrimination caused much bitterness. Chamberlain was marked as the enemy of the poor, and his housing act lost the Conservatives more votes than it gained.
BALDWIN AND PROTECTION
Still, there seemed no reason why the government should not jog on. Its majority was solid; economic conditions were not markedly deteriorating. Without warning, Baldwin raised the ghost which Law had exorcized in 1922. On 25 October he announced that he could fight unemployment only if he had a free hand to introduce Protection. His motives for this sudden decision remain obscure. Protection had been for many years at once the inspiration and the bane of the Conservative party. There would hardly have been a lively mind or a creative personality on the Conservative benches without it. On the other hand, it had repeatedly brought party disunion and electoral defeat. Hence Balfour had sworn off it in 1910, and Law in 1922. There seemed little reason to revive this terrible controversy now. An imperial conference was indeed in session, principally to ensure that no British government would ever take such an initiative as Chanak again. The conference expressed the usual pious wish for Imperial Preference. This meant in practice British tariffs on foreign food, while foodstuffs from the Dominions came in free. There would be Dominion preferences for British manufactures only in the sense that Dominion tariffs, which were already prohibitively high, would go up further against the foreigner. This was not an attractive proposition to put before the British electorate, and Baldwin did not attempt it. He pledged himself against 'stomach taxes'. There would be 'no tax on wheat or meat'. Imperial Preference was thus ruled out.
Later, when Protection had brought defeat for the Conservatives, Baldwin excused himself on grounds of political tactics. Lloyd George, he alleged, was returning from a triumphal tour of North America with a grandiose programme of empire development. Baldwin 'had to get in quick'. His championing of Protection 'dished the Goat' [Lloyd George].1 Austen Chamberlain and other Conservatives who had adhered to Lloyd George swung back on to Baldwin's side. This story seems to have been devised after the event. Chamberlain and the rest were already swinging back; there was no serious sign that Lloyd George was inclining towards Protection. Perhaps Baldwin, a man still little known, wished to establish his reputation with the Conservative rank and file. Perhaps he wished to show that he, not Beaverbrook, was Law's heir. The simplest explanation is probably the true one. Baldwin, like most manufacturers of steel, thought only of the home market. He did not grasp the problem of exports and hoped merely that there would be more sale for British steel if foreign supplies were reduced. For once, he took the initiative and learnt from his failure not to take it again.
Protection involved a general election in order to shake off Law's pledge of a year before. The cry of Protection certainly brought the former associates of Lloyd George back to Baldwin. This was more than offset by the resentment of Free Trade Conservatives, particularly in Lancashire. Defence of Free Trade at last reunited the Liberal party, much to Lloyd George's discomfiture—though this was hardly Baldwin's doing. With Free Trade the dominant issue, Lloyd George was shackled to the orthodox Asquithian remnant. Asquith was once more undisputed leader; Lloyd George, the man who won the war, merely his unwilling lieutenant. It was small consolation that the Asquithians had their expenses paid by the Lloyd George Fund.
The election of December 1923 was as negative as its predecessor. This time negation went against Protection, and doing nothing favoured the once-radical cause of Free Trade. Though the overall vote remained much the same— the Conservatives received about 100,000 less,3 the Liberals 200,000, and Labor 100,000 more—the results were startlingly different. The Conservatives lost over ninety seats, the Liberals gained forty, and Labor fifty.4 The dominant groups of 1918 were further depleted, relatively in one case, absolutely in the other. The trade unionists, once all-powerful, were now a bare majority in the Labor party (98 out of 191). The National (Lloyd George) Liberals, already halved in 1922, were now halved again, despite the Liberal gains. There were only twenty-six of them. Their former seats nearly all went to Labor, evidence that they had formed the Liberal Left wing. The outcome was a tangle: no single party with a majority, yet the Liberals barred from coalition by their dislike of Protection on the one side, of socialism on the other.
FIRST LABOR GOVERNMENT
It was obvious that the government would be defeated when parliament met. Then, according to constitutional precedent, the king would send for the leader of the next largest party, Ramsay MacDonald. Harebrained schemes were aired for averting this terrible outcome. Balfour, or Austen Chamberlain, should take Baldwin's place as Conservative premier; Asquith should head a Liberal-Conservative coalition; McKenna should form a non-parliamentary government of 'national trustees'. None of these schemes came to anything. Asquith was clear that Labor should be put in, though he also assumed that he would himself become prime minister when, as was bound to happen soon, they were put out. In any case, George V took his own line: Labor must be given 'a fair chance'. On 21 January the Conservative government was defeated by seventy-two votes.1 On the following day MacDonald became prime minister, having first been sworn of the privy council—the only prime minister to need this preliminary. George V wrote in his diary: 'Today 23 years ago dear Grandmama died. I wonder what she would have thought of a Labor Government!'; and a few weeks later to his mother: 'They [the new Ministers] have different ideas to ours as they are all socialists, but they ought to be given a chance & ought to be treated fairly.'2
MacDonald was a man of considerable executive ability, despite his lack of ministerial experience; he had also many years' training in balancing between the different groups and factions in the Labor movement. On some points he consulted Haldane, who became lord chancellor, principally in order to look after the revived committee of imperial defence. Snowden, MacDonald's longtime associate and rival in the I.L.P., became chancellor of the exchequer. MacDonald himself took the foreign office, his consuming interest; besides, he was the only name big enough to keep out E. D. Morel. The revolutionary Left was almost passed over. Lansbury, its outstanding English figure, was left out, partly to please George V, who disliked Lansbury's threat to treat him as Cromwell treated Charles I. Wheatley, a. Roman Catholic businessman who became minister of health, was the only Clydesider in the government; to everyone's surprise he turned out its most successful member. Broadly the cabinet combined trade unionists and members of the U.D.C. It marked a social revolution despite its moderation: working men in a majority, the great public schools and the old universities eclipsed for the first time.
The Labor government recognized that they could make no fundamental changes, even if they knew what to make: they were 'in office, but not in power'. Their object vas to show that Labor could govern, maybe also that it could administer in a more warm-hearted way. The" Left did not like this tame outlook and set up a committee of backbench M.P.s to control the government; it did not have much effect. The Labor ministers hardly needed the king's exhortation to 'prudence and sagacity'.1 All, except Wheatley, were moderate men, anxious to show their respectability. They were willing to hire court dress (though not knee-breeches) from Moss Bros. It was a more serious difficulty that they lacked experience in government routine. Only two (Haldane and Henderson) had previously sat in a cabinet. Fifteen out of the twenty had never occupied any ministerial post. Inevitably they relied on the civil servan:s in their departments, and these, though personally sympathetic, were not running over with enthusiasm for an extensive socialist programme.
EDUCATIONAL REFORM
Wheatley was the only minister with a creative aggressive outlook. His Housing Act was the more surprising in that it had no background in party discussion or programme, other than Labor's dislike of bad housing conditions, Unlike Neville Chamberlain or even Addison, Wheatley recognized that the housing shortage was a long-term problem. He increased the subsidy;2 put the main responsibility back on the local authorities; and insisted that the houses must be built to rent. More important still, he secured an expansion of the building industry by promising that the scheme would operate steadily for fifteen years. This was almost the first cooperation between government and industry in peacetime; it was also the first peacetime demonstration of the virtues of planning. Though the full Wheatley programme was broken off short in 1932 at the time of the economic crisis, housing shortage, in the narrowest sense, had by then been virtually overcome. Wheatley's Act did not, of course, do anything to get rid of the slums. It benefited the more prosperous and secure section of the working class, and slum-dwellers were lucky to find old houses which the council tenants had vacated. The bill had a passage of hard argument through the house of commons. Hardly anyone opposed its principle outright. Men of all parties were thus imperceptibly coming to agree that the provision of houses was a social duty, though they differed over the method and the speed with which this should be done.
One other landmark was set up by the Labor government, again almost unnoticed. Trevelyan, at the board of education, was armed with a firm statement of Labor policy, Secondary Education for All, drafted by the historian R. H. Tawney, who provided much of the moral inspiration for Labor in these years. Trevelyan largely undid the economies in secondary education which had been made by the Geddes axe, though he also discovered that Labor would be effective in educational matters only when it controlled the local authorities as well as the central government. More than this, he instructed the consultative committee of the board, under Sir Henry Hadow, to work out how Labor's full policy could be applied, and he deserves most of the credit for what followed even though the committee did not report until 1926. The Hadow report set the pattern for English publicly maintained education to the present day. Its ultimate ideal was to raise the school-leaving age to 15. Failing this (and it did not come until after the second World war), there should be an immediate and permanent innovation: a break between primary and secondary education at n.1 Hence the pupils at elementary schools, who previously stayed on to 14, had now to be provided for elsewhere or, at the very least, in special 'senior classes'. Here was a great achievement, at any rate in principle: a clear recognition, again imperceptibly accepted by men of all parties, that the entire population, and not merely a privileged minority, were entitled to some education beyond 'the three R's'. It was less fortunate that the new system of a break at 'eleven plus' increased the divergence between the publicly maintained schools and the private schools for the fee-paying minority where the break came at 13.