The fight against unemployment: 1931. Part 3

PAGE 4, Workers Proze, Friday February 11, 1972 During the depression. Unemployed workers staging a hunger march. THE FIGHTAGAINST UNEMPLOYMENT JACK What did happen in 1931?

In 1929 the Labour Party was returned as a minority government, allowed to survive only by the courtesy of the Tories and Liberals, in time to meet the full effects of the collapse of the boom in the United States.

In June 1930, unemployment in Britain stood at 1,122,000. By January 1930 it was over 11 million by by April it was 1,700,000, mid-summer over 2 million, and by the end of the year it had soared to well over 2} million.

Feeble efforts were made to set up a Ministerial board co-ordinate employment schemes under J. H. Thomas (one of the members was Oswald Mosley), but MacDonald Was already appealing for support from the other parties.

In June 1930 he proposed a conference of leaders of the three parties. The Conservatives refused, but the Liberals agreed, and regular discussions between Labour and Liberal leaders took place from then on.

Such manoeuvres, however, were powerless to prevent the rapidly deepening crisis of world capitalism and the growing lack of confidence in British capitalism. There was an increasing London, accompanied louder and louder demands, both Britain and abroad, for reductions in national expenditure — especially in the cost of payments to the unemployed.

Winston Churchill, for instance, ( condemned paying for the longest time, in the loosest fashion, the largest doles to the largest number' ('Times', February 19, 1931).

This was accompanied strong pressure for economies from the permanent Civil Servants at the Treasury, and found echo inside he Labour government.

The Chancellor of the Exchequer, Philip Snowden, told parliament that 'no budget in the world could stand the strain that has been placed upon it by the increase in unemployment in the last 12 months'. Snowden also declared that the task was too big for any one party and the demand began to be raised that the House of Commons should function as a Council of State.

Unemployed man al nd his family living in a esti legi nat sist eac Sir sho sec Ass WOI An: wid Ger run led sys: anc Ens (ser Del n February, the government ablished the May Committee report on 'practical and itimate deductions in the ional expenditure'. This coned of two members from h Party and was chaired by George May, who until irtly before then had been retary of the Prudential surance Company.

Meanwhile, the capitalist crisis rsened. On May 1l the main ık in Austria - the Credit stalt - collapsed. There was lespread collapse of banks in rmany, leading to an intensified I on sterling which, in turn, to even less confidence in British economy. 3y July 14 the German banking em had collapsed completely, i by July 22, the Bank of gland had lost £22m of gold e L. Robbins "The Great pression').

In August 4 the Bank of gland announced that temrary credits of £50m each had shack. STARYATION been obtained from the Federal Reserve Bank of New York and the Bank of France.

This dependence of the Labour government on international financiers naturally led to the domination of the policies of the government by those financiers and their direct political representatives, the Tories. This is well illustrated by the negotiations between Snowden and Neville Chamberlain before the report of the May Committee was presented to parliament.

In his book, "An Autobiography, Snowden recounts how he was visited by Chamberlain:

•He was well aware of the mancial DOSIUOn and Would avoid puttins time in an embald rassing position. He was anxious to be helpful, and he thought it might be well if I could make a reply to him which would impress the country with the gravity of the situation. I gave him a full account of the information in my possession. We agreed upon the general line that he would take in his speech, and I promised to follow with a speech which ......Il anina tha dinnunnina sharin would raise ine aiscussion above party controversy' A similar line was being taken by other members of the Labour Cabinet, who later claimed to have opposed MacDonald all along. J. R. Clynes, for example, also spoke of the country expecting co-operation from the three parties.

The position of the Tories and Liberals was accurately described by R. Bassett in his book 'Nineteen Thirty-One': • 'The Conservatives and Liberals greatly preferred that the situation should be dealt with by the Labour government than that they should undertake the political risks involved' What these risks were became clear when the May Committee reported. It recommended reductions in the pay of Civil Servants, teachers and servicemen, but its main recommenaation was d reduction of £66,500,000 in nent expenditure, including a 20 per cent cut in the standard rate of unemployment benefit.

Clearly there was no hope of an open Tory, government getting away with such measures. A Labour 'Front' was needed to force such things down the throats of the working class.

No wonder 'The Times'; reported on August 4:

'The Conservatives recognize that the government are in an extremely difficult position, largely owing to the campaign which is already being waged in some Labour quarters against the May report.' But withdrawals of foreign balances from London were increasing daily, the temporary credits were being used up rapidly and pressure from America and Europe for cuts in unemployment expenditure was being stepped "The Times', of August 12, reported that constant discussions were going on between MacDonald and Snowden and Baldwin (the Tory leader), Samuel (the Liberal leader) and the Deputy Governor of the Bank of England. (The Governor of the Bank of England had collapsed due to 'exceptional strain' and had to leave the country to recuperate!)

One of the myths of Labour Party history is that MacDonald, Snowden, Thomas and Sankey were the only traitors, while Henderson, Morrison, etc., were loyal . to socialism, standing out bravely in detence ot the unemployed and breaking resolutely from MacDonald, whom they had never realized was going to the Tories.

The truth is that none of the leaders of the Labour Party saw any alternative to some sort of attack on working-class standards. They clung to MacDonald, striving to reach some compromise, until he broke from them.

One of the proposals put for- Ans of tha mannenle must for ward as 'alternative' to dole cuts by the 'lefts' was a revenue tariff of 10 per cent to 20 per cent. This would have raised the cost of living and been a disguised cut in wages and doles.

The whole Cabinet agreed to economies totalling £78,500,000. These included increased insurance contributions and limited the period of benefit to 26 weeks; cuts in the salaries of government and public employees (such as teachers); and reduced expenditure on the roads. (This last meant, in effect, smashing one of the few attempts by the government to provide employThese proposals, however, met with tremendous opposition from the trade unions, and a deputation from the TUC General Council met the Cabinet and demanded that they be withdrawn and replaced by graduated tax on profits and a levy on unearned income.

It was this pressure from the unions which produced split in the Cabinet, pushing some of those members most closely connected with the unions into opposition to the proposed cuts. This produced a state of turious despair amongst the right-wing, illustrated most clearly by an entry in Beatrice Webb's Diary (August 22):

"The General Council are pigs,' S.W. [Sydney Webb] said. "They won't agree to any cuts of unemployment benefits or salaries or wages.

The opposition from the unions forced the Cabinet to modify its proposals, but the lack of a real socialist alternative to MacDonald was revealed by the fact that even then the whole Cabinet agreed to cuts totalling £56,000,000 (see R. Bassett 'Nineteen Thirty-One').

These proposals included 15 per cent cut in salaries, a saving Unemployment on Transitional benefit by the use of a Means Test, and a levy on all employed MacDonald was now in a crisis. On the one hand, the reaction of the working class through the unions created a split 1N the Stanley Baldwin.

Cabinet; on the other hand, the Tories and Liberals, backed up by the bankers, refused to cooperate unless the total economies came to £78,500,000 and there were cuts in the dole.

Samuel, for instance, described the Cabinet's proposals as 'bold' and 'courageous', • but went on:

'We [i.e., both Liberals anc Conservatives] doubted whether such a large sum of savings could be effected . . . without a diminuation in the scale of unemployment allowances.' It was because of this impasse that a conference of the laders of the three parties, on August 21, had to be adjourned and an emergency Cabinet meeting called, at which there was unanimity on the need to seek the support of the Liberals and Tories.

Meanwhile, the Bank of England had exhausted its own credit in America and France and any further loans had to be negotiated on behalf of the government. The chairman of the Federal Reserve Bank of New York told the government's representatives that they could probably raise a further loan of f50m in New York and Paris, provided an adequate economic programme was approved by parliament. In other words, a programme acceptable to the Tories.

CONTINUE TOMORROW