The Fall of the Labour Government in Great Britain, August, 1931

Abstract

HE fall of Ramsay MacDonald's second Labour government 1 in the depths of the silly season in August, 1931, was, in its consequences, an event of the first magnitude. As a result of the world depression, and especially of the financial crisis in central Europe which had first been openly revealed in the failure of the Credit Anstalt, there was a large-scale withdrawal of foreign credits from London which so depleted the gold reserves of the Bank of England as to cause a sudden crisis. To restore foreign confidence in the London money market a gesture was demanded -the balancing of the British budget. Over the means of doing this, including a reduction of unemployment benefit payments, the Labour cabinet was divided, and resigned. It was followed by a so-called National government under MacDonald, made up of Conservatives and Liberals and a handful of dissident Labourites including Philip Snowden, the chancellor of the exchequer, and J. H. Thomas, the dominions secretary. Against pledges given at the time of its formation, that it was a temporary coalition of leaders to save the country and the pound, this National government, having abandoned the gold standard on September 2 1, called and contested a general election in October in which, thanks in great part to the lead given by MacDonald and the vituperation hurled by Snowden at his former colleagues (Bolshevism run mad, for example) in a campaign of great bitterness, the Labour party was decisively defeated. The National government, mainly Conservative in composition, if not in namecontinued in nmx;rPr rtntul tbhe I