When the American economy cratered in the winter of 1901, the shockwaves were immediately felt on the far side of the Atlantic. Within a day of the NYSE’s disastrous opening on 19 December, the LSE registered similar lows as panicked British businessmen dumped American stocks and bonds.
By autumn of 1902, Britain was quick following the United States into depression.
The Crisis came at an inopportune time, as the mighty British Empire struggled to accommodate itself to the twentieth century.
Unemployment was never as severe in Britain as it was in America, topping out at 18% in 1905. But it was still severe and played havoc with the already volatile British political scene.
In 1902, Britain was experiencing the dissolution of the two-party system that had endured since the mid-19th century, that perennial struggle between the parochial, aristocratic Conservatives and the cosmopolitan, bourgeois liberals. The growth and increasing organization of the industrial proletariat had resulted in a variety of trade-unions and working class leagues, most notably the Labour Representation Committee, which true to its name, represented various British unions, and leagued with the small Independent Labour Party and the Liberals to make itself heard at Westminster.
For decades, the Conservative-Liberal dynamic had been simple and consistent enough – the Conservatives urged caution in all spheres and supported the protection of British culture and economy from rash action and outside influence. They defended the established church, the interests of the old landed aristocrats, and the territorial integrity of Great Britain. They were the party of the ancien régime. The Liberals were the party of the modern world. Their battle cry was inevitably ‘free trade,’ they pushed for the extension of the franchise, and though they were not necessarily hostile to the church, tended to be more so than the Conservatives.
But by 1900, Britain was becoming increasingly polarized along class lines. The granting of suffrage to working class men meant the inevitable shift leftwards of the existing system, as trade union and even socialist sponsored candidates were elevated to the House of Commons. The 1889 dockers’ strike had scandalized many in the upper classes, and America’s Red Summer and subsequent bloodshed had done little to ease nerves. The Liberals, who found themselves naturally allied to the growing labor movement by dint of being the most left-wing force in mainstream politics, suddenly found that their traditional brand of laissez faire, hands off management was not enough for many of their grindingly poor new proletarian constituents. Certain Liberals like Lloyd George and Winston Churchill were galvanized to push for social legislation that would alleviate the sufferings of English workers, much to the chagrin of most Conservatives and not a few of their own party men, who saw ‘socialistic’ measures at play.
Conscious they were not yet a force able to contest power itself, the small minority of British socialists in the ILP and the LRC were, as mentioned, generally forced into coalition with the Liberals.
Also polarizing the British parliament was the question of Ireland – for decades now the Irish had agitated for some measure of independence from London, a goal that came to be known as ‘Home Rule,’ which would entail the creation of a local Irish parliament and and practical autonomy on the Emerald Isle. The issue became a standard for the Liberals, and the bête noire of the Conservatives, who feared the dissolution of the Empire.
In the past few years, the Irish Nationalist party had risen to prominence, dedicated single-mindedly to the achievement of Home Rule and siding always with the Liberals in parliament. Home Rule was massively popular with the Catholic majority of Ireland. But it was just as unpopular with the Protestant Ulstermen in the north, who had enjoyed political and economic ascendancy on the isle for generations and feared to be left at the mercy of their ‘Fenian’ counterparts, who they tended to view as not only religiously but even racially inferior.
Some Conservatives began to see the Liberals as the harbingers of centrifugal forces – class and ethnic hatred – that would ultimately tear Britain apart if left to fester.
That was the Britain on which the Crisis came.
By 1905 unemployment in the British Isles neared 15% (higher in Ireland), and things seemed to be coming apart at the seams. Looking across the ocean, many British Liberals and certainly socialists were horrified by what they saw as the dictatorial suppression of their American fellows by McKinley with the December Decree, and the incoming of Frick soon after. Keir Hardie, Scottish trade unionist and head of the LRC, wrote sadly that “America is sliding backwards into barbarism – God willing England will not follow.” H.H Asquith, leader of the Liberal Party but certainly no socialist, was almost as upset, condemning the mass arrest of SLP congressmen as “shameful and infamous.” It also greatly lessened the trust British Liberals and socialists put into their own domestic right, who they feared might try a similar gamble here at home as strikes wracked London and northern England, and crime skyrocketed in working class slums.
Many Conservatives did little to assuage those fears. Even as the Liberals were forced left by their growing working-class base, certain Conservatives decided that the traditional party line was insufficient to rescue Britain from the new and unprecedented dangers facing her. Lord Richard Grenville Verney, 19th Baron Willoughby de Broke, was typical of these ‘New Right’ politicians. Willoughby de Broke was alarmed by the ascendancy of labor on the one hand and Irish nationalism on the other, and subsequently a staunch opponent of both socialism and Home Rule. Breaking to an extent from the aristocratic tradition of the Conservatives, he charged that the English proletariat had been left in the lurch, and vulnerable to the appeal of leftist demagogues. Their alliance with cosmopolitanism and Irish rebels was unnatural, and British workers could be won back to a good, conservative patriotism, he was sure, if only the Conservatives would reach out a hand. The explosive growth of socialism in America shook him, and he became convinced that such had to be headed off in Britain by any means necessary.
Behind Willoughby de Broke were men such as Lord Alfred Milner, Governor of the Transvaal, Hilaire Belloc, the Franco-British Catholic writer, and fiery journalists like Arnold White and Leopold Maxse, of The Daily Express and The National Review, respectively.
This New Right wished for Conservatives to come down from their ‘palaces’ and build up a mass base of the common people to combat that of the left. They warned that Britain was in grave peril from radical agitators and ‘alien’ influences, which ultimately ran to a fierce xenophobia initially directed mostly at Jews (stereotyped as ‘Asiatic’ invaders carrying the plague of radicalism) and Germans (as Germany's military buildup and ambitious Kaiser convinced many an Englishman that she was the premier threat to British interests in the world).
Maxse’s National Review spoke in favor of the social services for English workers that many Conservatives had disdained, but also violently denounced the LRC, the left-Liberals, Irish Home rule, and applauded the American suppression of the SLP. Arnold White vituperated against ‘East End Jews’ that he accused of spreading ‘communistic’ ideas among English workmen in exchange for German coin.
By 1906, the New Right, increasingly coalescing behind Lord Milner, had found an eager audience among Britons shaken by economic chaos and frightened by the increased agitation of the working classes and the Irish.
That summer, mass layoffs of miners resulted in a wave of violence through the Welsh countryside, ultimately resulting in ten deaths. A few months later, workers in the northern English coalfields went on strike, much to the horror of Arnold White, who hysterically demanded the troops be sent in lest ‘America’s Cripple Creek replay here in England.’ It was not an uncommon sentiment.
The 1906 coal strike petered out within months without much violence, but things came to a head in early 1907.
In 1906, a general election had brought in a large Liberal majority in the House of Commons, and H.H Asquith was invited to form a government, which he did in coalition with the Irish Nationalists and the LRC, much to the chagrin of the Conservatives.
With joblessness stubbornly refusing to abate, in February 1907, the Liberal-dominated parliament marshaled support for a ‘People’s Budget,’ which would tax the land holdings of the British aristocracy along with the foundries and factories of the industrialists, with an eye towards improving the miserable condition of the British poor. The Conservatives set themselves staunchly against what they saw as an unprecedented attack on their traditional rights and liberties.
The Conservative-dominated House of Lords predictably vetoed the bill when the time came. The Liberals were just as predictably indignant – Lloyd George accused the Tories of ‘starving Britain for their own gratification.’ Arthur Balfour, then-head of the Conservatives, but increasingly under the influence of Lord Milner and the New Right wing of the party, shot back that Britain’s ‘men of means’ would be happy to do what they could to alleviate the Crisis, but that it would never be done by ‘communistic compulsion.’
Asquith petitioned the king to side with the Liberals (and thus, the electorate) and threaten to flood the House of Lords with dozens of newly created Liberal peers if the Conservatives did not budge. But George was himself shaken by the strikes and tumult of recent years, not to mention the American chaos, and he took the side of the Conservatives.
The United Kingdom settled into a stand-off, as the House of Lords flatly refused to pass the People’s Budget, and Asquith’s Liberals floundered helplessly in opposition. Meanwhile, millions of British workers continued to languish in pauperdom. Public opinion hardened against the Lords, and shouts of “hang the peers!” become commonplace at labor and even Liberal rallies in the East End and the northern coal country.
Finally, in April 1907, the LRC, the TUC and the ILP unilaterally called a general strike until the House of Lords agreed to approve the People’s Budget. Asquith, who had not been consulted, was deeply alarmed. He asked Ramsay MacDonald, one of the ILP’s leaders and an associate of Hardie’s, to ‘call off the mob.’ MacDonald refused and said that Hardie would refuse also, adamant that ‘the Lords will come to terms only when the bread is snatched from their own mouths.’
The response was haphazard. British labor was not as militant or well-organized as German workers were or American workers had been. In many places, men and women went on working in defiance of the summons.
But in many other places, especially the northern industrial regions and the port cities, the call to arms was answered. Miners downed their pickaxes and longshoremen refused to load or unload ships. An estimated 200,000 workers participated in the strike.
Hysteria gripped the middle classes and the usual comparisons to 1871 in Paris and 1894 in Chicago were again trotted out.
The general restiveness was worrying enough, but a new development made the 1907 strike an unprecedented terror to British conservatives.
The call to strike was answered not only in England, Scotland, and Wales, but also in Ireland. Workers in Belfast occupied their factories and unfurled Irish national flags. Clashes with militias of Ulstermen left about a dozen dead, but most dreadfully of all, the striking workers in England and Wales heartily expressed satisfaction with their Irish ‘comrades.’ In a few scattered instances in Northumberland and South Wales, the press reported chants of “long live free Ireland!” from demonstrating laborers.
Such sentiment was rare, and probably meant more to irritate than express a sincere desire for Irish independence. But it was enough to utterly horrify Conservatives and especially hardline Ulster unionists, who saw the dual phantoms of a disordered proletariat and restive Irishmen combined into one.
Joseph Chamberlain led Conservative and Unionist MPs in demanding Asquith call out the army to disperse the strikers and do the work they would not. Particularly critical was coal, without which Britain could not live. But the prime minister, uncomfortable as he was with the radical action, was beginning to think Hardie had been right, and that there could be no better weapon to force the Lords to the table.
Balfour in turn pressed the king to dismiss Asquith and his government, who were “bringing Britain down to ruin.” The king had not unilaterally dismissed a government in seventy years. George tarried here, too.
Grassroots ‘self-defense’ militias sprang up across the country to protect against the ‘reds,’ and probably about a dozen were killed in small skirmishes nationwide, and many more injured.
Finally, Lord Milner made a desperate decision. He approached Asquith with a proposal: if the prime minister would call out the army and crush the strike, perhaps the Lords could be persuaded to approve the People’s Budget.
Asquith and the rest of the Liberal Party leadership deliberated for only a short while before acquiescence. The young Liberal Home Secretary Winston Churchill, in particular, was horrified by the ‘revolution.’ Despite having been himself slandered as a ‘red’ by Conservatives in parliament, he was fully supportive of putting down the ‘insurgent’ workers.
What happened next would be immortalized as the great betrayal of the British left.
Asquith initially considered asking Hardie and the rest of the strike leadership once more to back down, to inform them of the deal struck, and to warn them that a refusal would mean the deployment of the army. But Liberal acquiescence in the strike had fired the hatred of the Conservatives and the Unionists over the past several months. They were being called ‘revolutionists.’ The National Review had even accused the Liberal Party and the strikers of taking German money to destabilize Britain.
In the end, Asquith, along with Chancellor Lloyd George, Home Secretary Churchill, and Chief Secretary for Ireland James Bryce, decided a show of force would be needed to restore the respectability of the Liberals.
MacDonald, Hardie, and the rest of the labor leaders were left in the dark until the troops came thundering down. Most of the strikers dispersed without a fight, taken by surprise and utterly demoralized. But in some places, there was violence. eight men were shot dead in Northumberland after stones were thrown at a column of passing soldiers. A similar incident occurred in Clyde, where one civilian man and two women, along with a soldier, were killed in an altercation between miners and troops.
The worst was in Belfast, where the Coldstream Guards were deployed to quell street fighting between Irish nationalists and loyalist Ulstermen. Twenty-two people died.
The strike was suppressed within the week, and true to their word, the Lords passed the People’s Budget.
But the LRC, ILP, and union workers as a whole, were stunned by the treachery of their erstwhile allies.
Hardie denounced Asquith and the rest of the Liberals as snakes and blackguards. The Irish Nationalists were similarly furious, feeling that the Liberals bore responsibility for what was already being called the ‘Belfast massacre.’
Ironically, Asquith’s bid to save face and maintain the position of his party instead dealt an incalculably damaging blow to the Liberals.
In winter 1907, despite all his efforts, parliament passed a vote of no confidence in the government. It was supported both by the Conservatives, who were hardly mollified that Asquith had eventually restored order after allowing ‘anarchists’ to run riot for weeks, and by vengeful Labour and Irish Nationalists.
Asquith’s government fell.
A snap election was held in January 1908. It swept the Conservatives back to power in a landslide, winning an absolute majority of 352 seats in the House of Commons. Many workers and even Irish nationalists are supposed to have voted for the Conservatives out of spite. Few Conservatives tried to make up the difference by voting Liberal in gratitude.
Balfour was invited to become Prime Minister again, and he dutifully formed a government.
Balfour cannot himself be said to have been on the New Right of his party. But that faction loomed ever larger behind him, headed up by Lord Milner along with Joseph Chamberlain, Willoughby de Broke, L.S Amery, and Arnold White, among others. The crisis of 1907 had convinced many Conservatives of the necessity of social reform in the interest of the lower orders, if similar episodes were not to become regular occurrences. At the same time, they were convinced of the necessity of cracking down – and brutally – on ‘agitators’ who sought to stir up the working class to such tumult. This mingled with the aforementioned growing xenophobia directed towards continentals (which meant, in practice, Germans and Jews) as the exporters of those radical agitators, and also towards the Irish as a disloyal element in the rear. On top of this reactionary confection was layered a renewed imperialist aggression, which meant to direct the violent energies of Englishmen outwards rather than inwards, towards racial and cultural inferiors. It would be some years yet before the New Right came to be a decisive force in British politics, but its contours were already taking shape when Balfour regained the premiership in 1908.
