033.1140 Stimson, H. L./155½
Memorandum by the Secretary of State of a Conversation With the British Prime Minister (MacDonald), London, August 27, 1931, 8 a.m.
At eight o’clock I called at 10 Downing Street, took breakfast with the Prime Minister and was with him until about ten minutes before nine. I told him that if he cared for the opinion of an alien I congratulated him on the position he had taken in supporting the National Government and said that it was, however, no surprise to me because it was what I expected he would do. He said there had been no question about what he ought to do, although he fully expected it ended his public life. He spoke of it being the second time that he had had to take such a step. At breakfast his daughter Sheila and his two sons, Malcolm and Alastair, were present. Malcolm had just come out with a statement stating he would support his father and I congratulated him on that.
MacDonald told me that the King had insisted upon his being Prime Minister, although he wanted to resign. I heard the same thing from others during the day. He also told me that he himself tried to stipulate that he remain in office only five weeks but the other parties were insisting that he should remain longer. (Note: I have heard nothing but praise of MacDonald’s action since it was announced. The British papers, except the Labour Herald, are unanimous in support of him and everyone whom I spoke to spoke of him in most eulogistic terms.) He spoke of the argument that was being made against him by the Labourites, namely, that they had surrendered to the bankers and as an illustration of this he [Page 564] said that they were being asked a pretty high rate of interest by Morgan and Company, namely, 4½ per cent, and this would be used by the Labourites as an argument to show the surrender. I asked him at what rate they were able to sell their bonds in the domestic market and he said a little over 3 per cent. He said that in addition to the 4½per cent interest they had to pay a pretty big commission, I think he said 1½ per cent. I told him that if I had a chance I would put in a word to any of my friends in American banking that it was a bad time to try to make money out of a British loan.
The talk then passed to events that had transpired since the London Conference. I told him that I was trying to ascertain what the influence of the Conference had been; that at first the reaction with the Germans and with the daily press had been that the Conference had been a failure. The Germans had come over here expecting to get impossible things and when they didn’t get them they were bitterly disappointed that they had got nothing, but now I was rather of the impression that they were beginning to realize that the Conference had done a great deal for them and I was wondering whether the same impression had reached MacDonald or had appeared in the press. I found his impression as to the reaction in favor of the Conference coincided with mine. I did take up with him the points mentioned in Klots’87 letter of his interviews and found that in general it checked up very well with the British impression.
I checked up with him on Laval’s promise to me about the Bank of France and the British withdrawals and he said that apparently Laval had kept his promise because the Bank of France had acted very fairly ever since and they had no complaints.
I asked the Prime Minister about Henderson and the Disarmament Conference and he said technically Henderson was free to act as Chairman, but that it wasn’t decided at all whether he would or not. He said that the change in the Foreign Office88 made a great jar coming so soon before the meeting of the Council of the League as it did, and that Robert Cecil was going to represent Britain in the League.
I put up to MacDonald whether I should call on Reading and Henderson. He approved of my doing both and he said he would arrange about the Reading call. Later in the day I received word that he had arranged an appointment at 3:30 which I kept. I called and paid my respects to Reading. As to Henderson he said he would be very glad if I would do it. I said I was doing it as a personal meeting, not seeming to let him down when he went out of office. [Page 565] He said he appreciated my reason for doing so, but that I not call at the Transportation Office but at Henderson’s hotel; otherwise the Labour people would make capital out of it.
Our whole talk was on the old familiar, friendly basis, and I came away with a good impression of what he was doing. He said he would keep up in his new position the same relations with me as before and would write and telephone informally when it seemed helpful.