The Washington times., 1931-08-25
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MaCDonaId's Political Doom
Seen, With Henderson as
Heir to Party Leadership
CONTINUED From Page y
Sir Austen Chamberlain, Con-
Gervative.
Secretary Of State for Scot
land, Major Sir Archibald Sin
clair. Liberal.
Minister Of Education, Sir
Donald MacLean, Liberal.
Minister of Labor, Sir Henry
Betterton, Conservative.
Commissioner Of Works, the
Marques Of Londonderry, Con-
servative.
Chancellor Of the Duchy. Of
Lancaster, the Marquis Of
Lothian, Conservative.
A semiofficial denial Of the
charges published By the London
Daily Herald that American bank
ers had dictated" the internal
pclicies of Great Britain to such
an extent as to cause the over
throw of the Labor government
was issued by spokesman at the
foreign office today.
Herald Charge Denied
The denial was issued on the
authority of q deputy governor Of
the Bank of England, acting in
the absence on holiday Of Gov.
@rnOr Montague Norman and
heads Of the British treasury and
the foreign office.
The statement was a blanket
kdenial of the charges. 1t is known
here that under United States
law Federal Reserve banks can
have no contact with foreign gov
ernments. their dealings being re-
stricted solely to the central banks
Of foreign countries.
A report that David Lloyd
George, leader Of the Liberal
party, had accepted a portfolio
in: the coalition cabinet was
3latly denied by Mr.. Lloyd
Georges secretary who said:
''The story is totally untrue
and without foundation. The
state Of Mr.. Lloyd Georges
health does not yet permit
him to undertake such an
.arduOuS task" r
In a leading article. the Herald.
official organ Of the Labor Party.
declared without reserve that the
attitude of American bankers
with respect to Britain's credit
was directly responsible for the
resignation Of the Labor cabinet
and the appointment Of a coali-
&ion in its stead.
=. Reserve Bank Accused
"Last night" declared the
Daily Herald. at was announced
that the Federal Reserve Bank
of New York was prepared to
extend further large credits to
the Bank Of England.
Behind this news lies the
amazing fact that the late gov
ernment was informed by the
Federal Reserve that such
credits would only be granted
provided specific and considers
BILE economies were at once
made in the administration or
in actual benefits paid under
the unemployment insurance
scheme. .s.. -,...
+This virtual uItimatum by
New York bankers played a
vital part in dividing the late
cabinet on the issue of q 10
per cent reduction in unem-
plOyment benefits.
'InSiStence by the Bank Of
England that it had no need Of
credits-even on these terms
heightened the existing clash
within the cabinet. 1t has
been made absolutely clear
that credit will not be forth
coming unless and until meas
:. ures which United States bank.
ers consider satisfactory are
put into operation by the new
cabinet.
The charge caused a nation
wide sensation.
Radio Answer Expected
Premier Macdonald was ex-
pected to make some sort Of an
answer in a radio broadcast to-
night. With the exception Of the
Herald, the press unanimously in
dorses the new government and
lauds Mr.. Macdonald for his
statesman-like course Of action.
In sitting the Herald's charges,
observers took into consideration
the fact that Premier Macdonald
has become isolated from his
Labor following, and that move
nent Is under way to remove him
from the Labor party on the
grounds Of his betrayal of So
cialistic principles.
Henderson As Leader
. Arthur Henderson is looked to
as Mr.. MacDonald'S probable sue
cessor as party leader.
Meanwhile, prospects lOOmed Of
aAIively session when Parliament
Cdnvenes September 8, and there
Is. every likelihood Of one of the
fiercest general elections in his
tory in October or November.