as they had capitalist governments they could not trust them with
armaments.'2
The cleavage between old Labor and new was not absolute. Not all the trade
unionists were moderate men, and the moderates had turned against Lloyd
George after the war, even to the extent of promoting a general strike to
prevent intervention against Russia. All of them, thanks to Henderson, had
accepted a foreign policy which was almost indistinguishable from that of
the U.D.C.3 On the other hand, not all the I.L.P. members were extremists:
both MacDonald and Snowden, for example, were still I.L.P. nominees. The
new men understood the need for trade union money and appreciated that they
had been returned mainly by working-class votes. For, while Labor had now
some middle-class adherents at the top, it had few middle-class voters;
almost any middle-class man who joined the Labor party found himself a
parliamentary candidate in no time. Moreover, even the most assertive
socialists had little in the way of a coherent socialist policy. They
tended to think that social reform, if pushed hard enough, would turn into
socialism of itself, and therefore differed from the moderates only in
pushing harder. Most Labor M.P.s had considerable experience as shop
stewards or in local government, and they had changed things there simply
by administering the existing machine in a different spirit. The Red Flag
flew on the Clyde, in Poplar, in South Wales. Socialists expected that all
would be well when it flew also at Westminster.
Nevertheless, the advance of Labor and its new spirit raised an alarm of
'Bolshevism' particularly when two Communists now appeared in
parliament—both elected with the assistance of Labor votes.1 The alarm was
unfounded. The two M.P.s represented the peak of Communist achievement. The
Labor party repeatedly refused the application of the Communist party for
affiliation and gradually excluded individual Communists by a system more
elaborate than anything known since the repeal of the Test Acts.2 Certainly
there was throughout the Labor movement much interest in Soviet Russia, and
even some admiration. Russia was 'the workers' state'; she was building
socialism. The terror and dictatorship, though almost universally
condemned, were excused as having been forced on Russia by the Allied
intervention and the civil war. English socialists drew the consoling moral
that such ruthlessness would be unnecessary in a democratic country.
Democracy—the belief that the will of the majority should prevail—was in
their blood. They were confident that the majority would soon be on their
side. Evolution was now the universal pattern of thought: the idea that
things were on the move, and always upwards. Men assumed that the curve of
a graph could be proj ected indefinitely in the same direction: that
national wealth, for example, would go on increasing automatically or that
the birth rate, having fallen from 30 per thousand to 17 in thirty years,
would in the next thirty fall to 7 or even o. Similarly, since the Labor
vote had gone up steadily, it would continue to rise at the same rate. In
1923 Sidney Webb solemnly told the Labor annual conference that 'from the
rising curve of Labor votes it might be computed that the party would
obtain a clear majority . . . somewhere about 1926'.' Hence Labor had only
to wait, and the revolution would come of itself. Such, again according to
Webb, was 'the inevitability of gradualness'.
RAMSAY MACDONALD
When parliament met, the Labor M.P.s elected Ramsay MacDonald as their
leader. The election was a close-run thing: a majority of five, according
to Clynes, the defeated candidate; of two, according to the later, perhaps
jaundiced, account by Philip Snowden. The Clydesiders voted solid for
MacDonald to their subsequent regret. The narrow majority was misleading:
it reflected mainly the jealousy of those who had sat in the previous
parliament against the newcomers. MacDonald was indeed the predestined
leader of Labor. He had largely created the party in its first years; he
had already led the party before the war; and Arthur Henderson had been
assiduously preparing his restoration.2 He had, in some undefined way, the
national stature which other Labor men lacked. He was maybe vain, moody,
solitary; yet, as Shinwell has said, in presence a prince among men. He was
the last beautiful speaker of the Gladstone school, with a ravishing voice
and turn of phrase. His rhetoric, though it defied analysis, exactly
reflected the emotions of the Labor movement, and he dominated that
movement as long as he led it.
There were practical gifts behind the cloud of phrases. He was a first-
rate chairman of the cabinet, a skilful and successful negotiator, and he
had a unique grasp of foreign affairs, as Lord Eustace Percy, by no means a
sympathetic judge, recognized as late as 1935.3 With all his faults, he was
the greatest leader Labor has had, and his name would stand high if he had
not outlived his abilities. MacDonald's election in 1922 was a portent in
another way. The Labor M.P.s were no longer electing merely their chairman
for the coming session. They were electing the leader of a national party
and, implicitly therefore, a future prime minister. The party never changed
its leader again from session to session as it had done even between 1918
and 1922. Henceforth the leader was re-elected each year until old age or a
major upheaval over policy ended his tenure.
Ramsay MacDonald set his stamp on the inter-war years. He did not have to
wait long to be joined by the man who set a stamp along with him: Stanley
Baldwin. Law doubted his own physical capacity when he took office and did
not intend to remain more than a few months. It seemed obvious at first who
would succeed him: Marquis Gurzon,1 foreign secretary, former viceroy of
India, and sole survivor in office (apart from Law) of the great war
cabinet. Moreover, in the brief period of Law's premiership, Curzon
enhanced his reputation. Baldwin, the only possible rival, injured what
reputation he had. Curzon went off to make peace with the Turks at the
conference of Lausanne. He fought a lone battle, almost without resources
and quite without backing from home, in the style of Castle-reagh; and he
carried the day. Though the Turks recovered Constantinople and eastern
Thrace, the zone of the Straits remained neutralized, and the Straits were
to be open to warships in time of peace—a reversal of traditional British
policy and an implied threat to Soviet Russia, though one never operated.
Moreover, the Turks were bewitched by Curzon's seeming moderation and laid
aside the resentment which Lloyd George had provoked. More important still,
Curzon carried off the rich oil wells of Mosul, to the great profit of
British oil companies and of Mr. Calouste Gulbenkian, who drew therefrom
his fabulous 5 per cent.
DEBTS AND REPARATIONS
Baldwin, also in search of tranquillity, went off to Washington to settle
Great Britain's debt to the United States. Law held firmly to the principle
of the Balfour note that Great Britain should pay her debt only to the
extent that she received what was owed to her by others. Anything else, he
believed, 'would reduce the standard of living in this country for a
generation'. Baldwin was instructed to settle only on this basis. In
Washington he lost his nerve, perhaps pushed into surrender by his
companion, Montagu Norman, governor of the bank of England, who had an
incurable zest for financial orthodoxy. Without securing the permission of
the cabinet, Baldwin agreed to an unconditional settlement on harsh terms2
and, to make matters worse, announced the terms publicly on his return. Law
wished to reject the settlement: 'I should be the most cursed Prime
Minister that ever held office in England if I accepted those terms.' His
opposition was sustained by the two independent experts whom he consulted,
McKenna and Keynes. The cabinet, however, was for acceptance. Law found
himself alone. He wished to resign and was persuaded to stay on by the
pleas of his colleagues. He satisfied his conscience by publishing an
anonymous attack on the policy of his own government in the columns of The
Times.
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
