Letter to Stanley Baldwin from Prime Minister Ramsay MacDonald, 23rd September 1931 (PRO 30/69/132)
MacDonald was writing a month after the formation of the National Government. The Conservative Stanley Baldwin was in his Cabinet.
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10, Downing Street,
23rd September 1931
My dear Baldwin,
This morning I feel nothing but a fraud. I crawled into my car at 5 yesterday and jumped out of it at 7.30. This morning headaches and everything else have gone, and I want to be with you. I shall stay till Friday morning however under the care of two old lady friends whom I see only at meals. The rest of the time, whether it rains or shines, I shall be on the shingle by the sea.
We have much to ponder over and make up our own minds upon. First, is it advisable to have an election? My city friends and those outside the busy world of politics are unanimously opposed, and regard the proposal as a heartless piece of political craft. If one thinks of the problems in action which it will raise -how are we to go to the country? Upon what programme? What is to be the position after the Election? And so on -it seems to be but a new entanglement and trouble. On the other hand, we must protect the country from an election fought at a time when influences which will make for unsettlement and the harum-scarum will be at their maximum power. I think we have the imperative duty to try and agree upon one or two things fundamental to policy, first of all, and then see what the situation is.1. What are we now to aim for? A return to fold [gold], a return to old currency values, a managed currency -We cannot be mere spectators, with the City the active agents. We must keep a controlling hand and an informed and reflecting mind. I have asked a few of our best authorities to enlighten me on these questions, and set them going before I left town yesterday.
Then we must consider the question of the balance of trade in its new setting. The new currency position is in effect a tariff, e.g. it acts in the same way and up to a point in precisely the same way as a tariff. As a result I expect that some of those who, whilst we were on the gold standard, would have accepted unwillingly a tariff, will not do so now, and to that extent we shall have to face a new problem.
Then, we have the finest chance ever given to us to lead in an international move for a complete readjustment of world financial, involving commercial, relations. We should move in this at once if we are to take and keep the lead and the control. We should therefore set about the preparation of a communication to the U.S. and France on this subject. Had I been in London to-day I should have had a conference with the Treasury preparatory to bringing the matter before the Cabinet, but I shall work at it myself this week-end.
Rapid action on the position in which we now find ourselves is necessary. The hand of the Government must be felt in the City (not in any sense as mere interference, but as a consistent and scientifically directed influence) and on the financial policy of foreign governments. For the moment we have both the prestige and the good will, and we must strive not to lose this. Upon it depends the future states and powers of our country.
I shall be in London for a few hours on Friday forenoon arriving about 11 or 12 at Downing Street. and shall be glad to see you at the House of Commons.
I am so sorry to leave you at this moment but during Monday night and Tuesday forenoon I was really at the dark bottom of the well. Horder [Thomas Horder was MacDonald's doctor] supplied me with a stout rope and a good bucket, so now I sit at the top once more.
J. Ramsay MacDonald.