Lord Esher as well as through Brand's brother, Viscount Hampden, a lord-in-waiting to
the King, or more directly through Milner's son-in-law, Captain Alexander Hardinge, a
private secretary to the King. In any case, Milner exercised a very powerful influence on
Baldwin during the period of his first government, and it was on Milner's advice that
Baldwin waged the General Election of 1924 on the issue of protection. The election
manifesto issued by the party and advocating a tariff was written by Milner in
consultation with Arthur Steel-Maitland.
In the period 1924-1929 the Milner Group usually held about a third of the seats in the
Cabinet (seven out of twenty-one in the government formed in November 1924). These
proportions were also held in the period 1935-1940, with a somewhat smaller ratio in the
period 1931-1935. In the Cabinet that was formed in the fall of 1931, the Milner Group
exercised a peculiar influence. The Labour Party under Ramsay MacDonald was in office
with a minority government from 1929 to September 1931. Toward the end of this
period, the Labour government experienced increasing difficulty because the deflationary
policy of the Bank of England and the outflow of gold from the country were
simultaneously intensifying the depression, increasing unemployment and public
discontent, and jeopardizing the gold standard. In fact, the Bank of England's policy
made it almost impossible for the Labour Party to govern. Without informing his Cabinet,
Ramsay MacDonald entered upon negotiations with Baldwin and King George, as a
result of which MacDonald became Prime Minister of a new government, supported by
Conservative votes in Parliament. The obvious purpose of this intrigue was to split the
Labour Party and place the administration back in Conservative hands.
In this intrigue the Milner Group apparently played an important, if secret, role. That
they were in a position to play such a role is clear. We have mentioned the pressure
which the bankers were putting on the Labour government in the period 1929-1931. The
Milner Group were clearly in a position to influence this pressure. E. R. Peacock
(Parkin's old associate) was at the time a director of the Bank of England and a director of
Baring Brothers; Robert Brand, Thomas Henry Brand, and Adam Marris (son of Sir
William Marris) were all at Lazard and Brothers; Robert Brand was also a director of
Lloyd's Bank; Lord Selborne was a director of Lloyd's Bank; Lord Lugard was a director
of Barclay's Bank; Major Astor was a director of Hambros Bank; and Lord Goschen was
a director of the Westminster Bank.
We have already indicated the ability of the Milner Group to influence the King in
respect to the choice of Baldwin as Prime Minister in 1923. By 1931 this power was even
greater. Thus the Milner Group was in a position to play a role in the intrigue of 1931.
That they may have done so is to be found in the fact that two of the important figures in
this intrigue within the Labour Party were ever after closely associated with the Milner
Group. These two were Malcolm MacDonald and Godfrey Elton.
Malcolm MacDonald, son and intimate associate of Ramsay MacDonald, clearly
played an important role in the intrigue of 1931. He was rewarded with a position in the
new government and has never been out of office since. These offices included
Parliamentary Under Secretary in the Dominions Office (1931-1935), Secretary of State
for the Dominions (1935-1938 and 1938-1939), Secretary of State for the Colonies
(1935-and 1938-1940), Minister of Health (1940-1941), United Kingdom High
Commissioner in Canada (1941-1946), Governor-General of Malaya and British South-
East Asia (since 1946). Since all of these offices but one (Minister of Health) were
traditionally in the sphere of the Milner Group, and since Malcolm MacDonald during
this period was closely associated with the Group in its other activities, such as Chatham
House and the unofficial British Commonwealth relations conferences, Malcolm
MacDonald should probably be regarded as a member of the Group from about 1932
onward.
Godfrey Elton (Lord Elton since 1934), of Rugby and Balliol, was a Fellow of
Queen's College, Oxford, from 1919, as well as lecturer on Modern History at Oxford. In
this role Elton came in contact with Malcolm MacDonald, who was an undergraduate at
Queen's in the period 1920-1925. Through this connection, Elton ran for Parliament on
the Labour Party ticket in 1924 and again in 1929, both times without success. He was
more successful in establishing himself as an intellectual leader of the Labour Party,
capping this by publishing in 1931 a study of the early days of the party. As a close
associate of the MacDonald family, he supported the intrigue of 1931 and played a part in
it. For this he was expelled from the party and became honorary political secretary of the
new National Labour Committee and editor of its
made a baron in 1934, was on the Ullswater Committee on the Future of Broadcasting the