Liberals were returned by a large majority the Conservatives, with the
exception of a short break, had been in power for twenty years. Another
generation of the people had come to adult life since the early eighties
when the Liberals were last in real power, and a new set of Liberal
statesmen with advanced ideals had been put into office. The exultation
among the forces of progress was great. The hot hopes were to have a
speedy quenching. The laws of England are passed by the joint consent of
the King, the House of Lords, and the House of Commons. The House of
Commons is an electoral body, but the House of Lords has a hereditary
membership, descending from father to son. Of the six hundred members of
the House of Lords five hundred are Conservatives. The Conservative
minority in the Commons, faced with startling Liberal reforms, called to
their aid the five hundred stalwarts in the Lords, and the consequence
was that the sweeping measures introduced by the Liberals were promptly
thrown out by the Lords. Thus an intolerable situation presented itself
to the Liberal majority chosen by the nation to direct its Government.
Lloyd George, on being appointed Chancellor of the Exchequer, at once set
himself the task of meeting the difficulty, and there were weapons to his
hand. He planned not only an elaborate scheme of reform, but also the
means of putting it into execution in face of the House of Lords. The
ostensible function of the Budget is to provide a schedule of taxation
for the coming year in order to meet the current needs of the country.
Lloyd George's plan was to put forward his own conception of "the needs
of the country" and then to raise the money on account of them. He
purposed to bring about a wholesale readjustment between rich and poor
and to use the readjustment as a basis for developments in the future.
That was his bold and carefully devised plan of action. It will be asked
at once why the Lords could not frustrate this intention as well as those
embodied in the other Liberal bills they had thrown out. This was the
reason: the Lords were prevented by the constitution from altering money
bills sent up to them by the Commons, though they might do what they
liked with other bills. The people provided the taxes, the Commons are
elected by the people, and the power of the purse possessed by the
Commons gives the people the command in affairs of state. As long ago as
the time of Charles II. this rule about the Commons and Lords with
respect to money supplies was emphatically laid down. Lloyd George's
scheme was to wrap up social changes in his Budget and to dare the Lords
to meddle with them, inasmuch as they were part and parcel of a money
bill.
The country had no idea of this deep-rooted plan. Something sensational
was expected of Lloyd George, but his proposals, it was thought, would be
of a purely financial nature, including, possibly, heavy taxation of rich
people and relief of the indirect taxation of the poor. As a matter of
fact, Lloyd George, walking over from Downing Street to the House of
Commons on that Thursday afternoon, had three secrets in the leather
despatch-case he carried in his hand. One was the amount of money he was
going to raise, the second the sources from which he was going to obtain
it, and third the way in which the money was to be spent. Those of us
who saw him walking briskly across Palace Yard that afternoon in company
with Mr. Winston Churchill little thought that the small brown
despatch-case held plans which within three years were to alter vitally
the constitution of the United Kingdom as it had existed for eight
hundred years.
The national financial position was known in the morning before Lloyd
George made his speech. The amount needed for the current year by the
country for the army, navy, civil services, and social relief was
164,152,000 pounds. The revenue to be expected on the existing basis of
taxation was 148,390,000 pounds. A deficit of nearly 16,000,000 pounds
had, therefore, to be provided for. In addition, in the framing of this
as of other Budgets, regard was necessary to the automatic increase of
certain expenditures in coming years, increases which must be met by the
expanding capacity of schemes of revenue. (Though the Budget is an
annual affair, a good many of its features are necessarily continuing.)
After all this has been taken into account there must be remembered that
Lloyd George was planning still further expenditure. He had therefore to
get piles of money from somewhere or other and to make sure of it in
increasing volume as years went on.
I was present in the House of Commons to describe the Budget scene. The
Chamber was packed and was quivering with excitement when at four minutes
to three, during the preliminary business, Lloyd George, with a red
despatch-box in his hand, came into view from behind the Speaker's chair,
and passed with alert and nervous steps to the place on the Treasury
bench reserved for him between the Prime Minister, Mr. Asquith, and Mr.
Churchill. I can see Lloyd George now as he sat bolt-upright with one
knee crossed over the other, waiting for the moment when the chairman
should call on him. His face was pale and his eyes were rather dull. He
looked a little overwrought. He was feeling the tension; so much was
obvious. I remember wondering if he had reached the limit of his
strength, whether he was really big enough in spirit for the ordeal that
lay before him.
Within ten minutes the formal business of the day was over, and the
chairman, standing up on his dais, announced, "Mr. Chancellor of the
Exchequer." Lloyd George rose to the table. He seemed almost an
insignificant figure in the midst of the crowded assembly. Members were
filling all the seats, some squatting on the steps of the Speaker's
chair, others standing together in the space below the bar at the farther
end of the House. The galleries banked overhead were occupied by
distinguished visitors, foreign ambassadors, members of the House of
Lords, ladies of title, distinguished men of thought and action. It was
such an audience as is given to but few men in a lifetime.
In low voice and conversational phrase Lloyd George began his speech. He
told of the money that had to be raised, but he did not stop at the
narrative of what may be called ordinary expenditure. He told how the
primary duty of a rich nation was to help those who had been exhausted,
to give a chance to the downtrodden. He related some of the things he
had in his mind--the insurance of workmen against illness and
unemployment, the payment of pensions for persons over a certain age. He
told of how unemployment might be largely eliminated by developments in
the countryside, through new methods of agriculture, through light
railways, through afforestation, through stock-breeding, through the
reclamation of land. Efforts in these directions would not only help a
great many of the population at the present time, but would provide
enormously increased opportunities for coming generations. He proposed
that part of the money of the year should be taken up with these projects.
Very soon he swept into the explanation of how new money was to be
raised. It was necessary to set up a system which would, year by year,
produce an increasing supply of money. When Lloyd George came to the
point of his actual proposals you could have heard the slightest rustle
of an order paper, so keen were the silent Commons. He was going to
raise the income tax, he said, the existing impost on incomes of 160
pounds a year and over. He was going to put a super tax on rich people,
those who had 5,000 pounds a year or more. He was going to make big
additions to the duty charged on great estates when they changed hands.
Demand after demand he showered on the rich and comfortable. The
assembly, expecting surprises, had them in abundance. The Chancellor
drew sheaf after sheaf of notes from the red despatch-box on the table in
front of him and explained with an air of intensive reasonableness the
huge sums he proposed to draw from the property-owners in the country.
New inroads were to be made on the profits of land and liquor.
Coal-mines were to pay royalties. People were to be taxed when they
became rich without any effort on their own part, but by fortunate
accident in the increased value of special localities. There was to be a
complete valuation of every yard of land in the country as the basis for
developments to come.
Although the money to be raised that year by these new proposals would
not much more than cover what was required by immediate necessities, the
taxation was such as to multiply in product as years went on. Finally
the motive behind the revolutionary Budget of Lloyd George came in the
concluding words of his speech. "It is essential that we should make
provision for the defense of our country. But, surely, it is equally
imperative that we should make it a country even better worth defending
for all and by all. And it is that this expenditure is for both these
purposes that alone can justify the Government. I am told that no
Chancellor of the Exchequer has ever been called upon to impose such
heavy taxes in a time of peace. This, Mr. Chairman, is a war Budget. It
is for raising money to wage implacable warfare against poverty and
squalidness. I cannot help hoping and believing that before this
generation has passed away we shall have advanced a great step toward
that good time when poverty and wretchedness, and the human degradation
which always follows in its camp, will be as remote from the people of
this country as the wolves which once infested its forests."
It took a day or so for the full effect of the Budget to be understood.
And then enthusiasm rose in the breasts of Liberals and Labor men, while
the middle and upper classes poured forth outcries and protests. As the
proposals were discussed in detail, feeling arose on both sides, and
Lloyd George was variously described as a genius who was laying the
foundation of a new Britain and a predatory politician out to catch
votes. Throughout the length and breadth of the United Kingdom his name
was on the lips of all, either in execration or in praise.
The greatest Parliamentary fight of a generation began to take form in
the House of Commons. The Conservatives, led by Mr. Balfour, put up an
obstructive fight to every line and almost every word of the finance bill
which was founded on the Budget. Departmental duties all day, the onward
fight with his finance measure throughout the night and often the early
hours of the morning, became the routine of Lloyd George's life. I have
seen him at the table at the House of Commons at seven o'clock in the
morning, with ashen face and burning eyes, after a week of all-night
sittings, persuading, explaining, and arguing with determined opponents
of his measure. Often enough in these fatiguing morning hours there
would be sitting up behind the grille in the ladies' gallery an anxious,
but proud, woman watching the Welsh statesman at the table. It was Mrs.
George, the pretty Maggie Owen of years before whom the young Welsh
solicitor had taken from her father's farm.
In justice I ought to summarize in a few sentences written at the time
the attitude of the opponents of the Budget. "Why put forward these
extraordinary changes? Here was an unequaled nation, the richest and
greatest in existence, which by its character and energy had built up an
empire reaching across the globe, with Parliamentary institutions which
were the admiration of every state. The millions of our population were
welded in a common sentiment, unsurpassed since history began, making
unshakable the foundations of our nationality. We had fought our way to
modern conditions very slowly, and now, class for class, we were perhaps
the most contented and prosperous people on the face of the earth.
Admitted that we had vast crowds of silently enduring poor. (The poor we
have always with us, as has every great nation.) But the way to
ameliorate the evils among them was not to disturb the comfort,
convenience, or property of the rich, but to increase the prosperity of
rich and poor alike by putting a tax on foreigners' goods coming into
this country, thus providing revenue and increasing home manufactures at
one stroke. That was the course to pursue, not to disturb the elaborate
and happy system, the pride of the world, by sudden incursions into the
liberty of the individual and by depredations on the privileged in order
to benefit the unhappy. Property, whether obtained without effort or
built up by the hardest of labor, had its inalienable rights, and
violently to outrage those rights was not only unjust to the persons
chiefly concerned, but dangerous to the state at large."
The campaign which was set in motion against Lloyd George has not been
equaled in violence since the old free-speaking days of a century ago.
He was called a vulgar Welsh attorney. He was accused of having every
kind of attribute which was contemptible and hateful. One of the things
urged against him was that he was no gentleman and could not understand
the feeling of gentlefolk, owing to his unfortunate upbringing. His
opponents thus attacking him went into paroxysms of rage over a speech he
made at Limehouse in the East End of London, where he defended his
Budget. The Limehouse speech has become famous as an example of Lloyd
George's oratory. I give a few extracts to enable an idea to be formed
about it.
"The Budget is introduced, not merely for the purpose of raising barren
taxes, but taxes that are fertile taxes, taxes that will bring forth
fruit--the security of the country which is paramount in the minds of
all, provision for the aged and deserving poor. It was time it was done.
It is rather a shame for a rich country like ours, probably the richest
country in the world, if not the richest the world has ever seen, that it
should allow those who have toiled all their days to end in penury and
possibly starvation. It is rather hard that an old workman should have
to find his way to the gates of the tomb, bleeding and footsore through
the brambles and thorns of poverty. We cut a new path through, an easier
one, a pleasanter one, through fields of waving corn. We are raising
money to pay for the new road, aye, and to widen it, so that two hundred
thousand paupers shall be able to join in the march. There are many in
the country blessed by Providence with great wealth, and if there are
among them men who grudge out of their riches a fair contribution toward
the less fortunate of their fellow-countrymen, they are shabby rich men.
"We propose to do more by the means of the Budget. We are raising money
to provide against the evils and sufferings that follow from
unemployment. We are raising money for the purpose of assisting our
great friendly societies to provide for the sick, the widows, and the
orphans. We are providing money to enable us to develop the resources of
our own land. I do not believe any fair-minded man would challenge the
justice and the fairness of the objects which we have in view of raising
this money. But there are some who say that the taxes themselves are
unjust, unfair, unequal, oppressive, notably so the land taxes. They are
engaged, not merely in the House of Commons, but outside the House of
Commons, in assailing these taxes with a concentrated and sustained
ferocity which will not even allow a comma to escape with its life.
"We claim that the tax we impose on land is fair, just, and moderate.
They go on threatening that if we proceed they will cut down their
benefactions and discharge labor. What kind of labor? What is the labor
they are going to choose for dismissal? Are they going to threaten to
devastate rural England while feeding themselves and dressing themselves?
Are they going to reduce their gamekeepers? That would be sad. The
agricultural laborer and the farmer might then have some part of the game
which they fatten with their labor. But what would happen to you in the
season? No weekend shooting with the Duke of Norfolk for any of us. But
that is not the kind of labor they are going to cut down. They are going
to cut down productive labor--builders and gardeners--and they are going
to ruin their property so that it shall not be taxed. All I can say is
this: the ownership of land is not merely an enjoyment, it is
stewardship. It has been reckoned as such in the past, and if they cease
to discharge their functions, which include the security and defense of
the country and the looking after the broken in their villages and
neighborhood, those functions which are part of the traditional duties
attaching to the ownership of land and which have given to it its title,
if they cease to discharge those functions, the time will come to
reconsider the conditions under which land is held in this country. No
country, however rich, can permanently afford to have quartered upon its
revenue a class which declines to do the duty which it is called upon to
perform. And, therefore, it is one of the prime duties of statesmanship
to investigate those conditions.
"We are placing the burdens on the broad shoulders. Why should I put
burdens on the people? I am one of the children of the people. I was
brought up among them. I know their trials, and God forbid that I should
add one grain of trouble to the anxiety which they bear with such
patience and fortitude. When the Prime Minister did me the honor of
inviting me to take charge of the national Exchequer at a time of great
difficulty I made up my mind in framing the Budget which was in front of
me that at any rate no cupboard should be barer, no lot should be harder
to bear. By that test I challenge them to judge the Budget."
The passion among the middle classes and the upper classes rose to such a
pitch against Lloyd George's proposals as to cause more than one serious
and religiously minded person to write and express wonder that Heaven did
not strike dead such a wicked man before he could accomplish his fell
purpose in the ruin of the country.
There is a story told about a man who jumped from the pier at Brighton
into the sea to rescue a drowning person. In describing his experience
the rescuer said: "It was easy enough. Only a few strokes were necessary
to reach him. I got hold of him by the collar just as he was going down.
Having turned him over on his back to see that it wasn't Lloyd George, I
then brought him to the pier."
The House of Lords felt they had the country behind them, and they
proceeded to the unprecedented and unconstitutional course of killing the
Budget. This was exactly what Mr. Asquith and his first lieutenant had
been waiting for. Lloyd George saw the fruits of his labor destroyed in
a day, but he watched the process, not with despair, but with grim
satisfaction.
The Lords had broken their last Liberal bill, for Lloyd George had
determined to break the Lords.
VI
HOW LLOYD GEORGE BROKE THE HOUSE OF LORDS
A few days later, with Lloyd George sitting by his side, Mr. Asquith,
the Prime Minister, made the following announcement in Parliament: "The
House of Commons would, in the judgment of his Majesty's Government, be
unworthy of its past and of the traditions of which it is the custodian
and trustee if it allowed another day to pass without making it clear
that it does not mean to brook the greatest indignity and the most
arrogant usurpation to which for more than two centuries it has been
asked to submit. We have advised the Crown to dissolve Parliament at
the earliest possible moment."
The preparations for the general election included a campaign of
vilification against Lloyd George which shook even some of the
Conservatives. But the Chancellor of the Exchequer, on the other hand,
was not disturbed, and he did not hesitate to do a little vilification
on his own account. "What a low creature!" was the instant retort to
any incursions of this kind.
One of the secrets of Lloyd George's career was that he always made his
opponents too angry to appraise him correctly. They simply couldn't do
it. A little cold-blooded study of him and his past history would have
served them well. Because Lloyd George had a peculiarly bitter tongue
and a peculiarly stimulating one he was abused as a fluent demagogue
with nothing but unscrupulous and violent words to give him prominence.
This was not a mere pretense on the part of the upper classes. They
seriously believed it. As a result Lloyd George had a tremendous pull
over the whole lot of them. One secret of his power was that his real
strength lay not in words, but in his capacity for action. Because he
talked about things with recklessness and force it was assumed that he
could not do things. The hard fact was that he was more effective in
doing things and in getting them done than in talking about them. He
secured a wonderful advantage from all this. While hard names were
being showered on him, and even while he was replying to them, he was
at work quietly. I have often thought that as soon as his opponents
found him out they felt that this was not fair, that he ought to have
played the game and to have shown himself as exactly the kind of man
they had portrayed him to be. Yet, at the time, his enemies would
probably have been contemptuous of the suggestion that this ranting
person could possibly be a man who was specially gifted in carrying
plots and plans and big state projects into execution. They had to
learn to their cost that he was both resolute and stealthy.
Lloyd George had as his chief Mr. Asquith, a man of crystal intellect,
who had won high distinction, first at his university, than at the bar,
where he was a famous advocate, and latterly in the House of Commons,
where his mastery of Parliamentary arts was only equaled by that of the
rival leader, Mr. Balfour. His speeches were powerful, but they
appealed to the head rather than to the emotions. Unlike Lloyd George,
he was not by way of being a prophet. He could not by sheer intensity
sway the House of Commons. Mr. Asquith, moreover, was quite incapable
of stirring a public audience on the platform outside the House, and he
lacked that terrific energy which distinguished his principal
colleague. But he was, nevertheless, a first-rate partner. His
steady, cold brain would carry into effect with precision an intricate,
delicate, and bold plan of operations. He had hardihood. Every wile
in public life was known to him. He had strong will-power. And in
sheer brain of what may be called the purely intellectual type he was
miles ahead, not only of Lloyd George, but of all the other politicians
of the day. I should say here that he undoubtedly felt deeply the slur
cast upon the House of Commons by the Lords. And there is one more
trait that should be mentioned, his unshakable loyalty to those who
served under him, and to his brilliant Chancellor of the Exchequer not
less than to any of the others.
It implies, however, no disrespect to Mr. Asquith to say that he had
become the instrument of Lloyd George. It was the latter's subtle
brain that evolved the possible consequences which might ensue after
his first stroke in the Budget of April, 1909. It was his bold spirit
that urged the desperate course which was presently pursued. He
measured the Lords and decided that if they could not be frightened
into defeat they could be hustled into a wild attempt which would be
equally disastrous to them.