In 1922, after fourteen years as one of the city's two MPs, Winston Churchill was defeated as Liberal candidate for Dundee.Footnote 1 For him this was a key moment in his personal political biography, almost the last occasion on which he stood as a Liberal candidate as he began his journey back to the Conservative party.Footnote 2 It was also a key moment in the parliamentary politics of the city, with Churchill the last orthodox Liberal to be elected, so 1922 marked the final moment of the shift from a position of Whig/Liberal dominance, which had endured since the 1832 Reform Act, to a Labour predominance which was to last most of the twentieth century.Footnote 3 But beyond these two particular trajectories, Churchill's defeat can be used to examine a broader issue: the challenges to liberal political economy in Britain in the context of the First World War.Footnote 4 In particular, the focus here is on the impact of the war on reshaping the global division of labour and, above all, on the difficulties in responding to the domestic consequences of this reshaping.
Dundee is ideal for use as a basis for an examination of the links between local politics and global economic changes in this period because of the traumatic effects of the war and its aftermath for the economic vitality of the city. That vitality depended to an extraordinary extent on one industry – jute – which provided directly and indirectly most of the city's employment. Jute was an extremely ‘globalized’ industry. All raw jute brought to Dundee came from Bengal, and the markets for its product were scattered all over the world. But, in addition, the main competitive threat to the industry came from a much poorer economy (India) so that jute manufacturing was the first major British industry to be significantly affected by low-wage competition. Adding further complexity to this global entanglement was that India was, of course, part of the British empire, so that the challenge of responding to the industry's problems was necessarily embedded in imperial strategies and policies.Footnote 5
The war greatly accelerated the trends that were already evident in the jute industry well before 1914. Significant competition from jute factories in Bengal had been evident since the 1880s, although the Dundee industry continued to expand, albeit slowly, until the eve of war. The question of how to respond to this competition had been live in the city from that decade onwards, and many of the city's employers had shifted to a protectionist stance. But that stance had found little support in the wider electorate, and in 1908 Churchill had won on a strongly free trade platform, joining Alexander Wilkie, a Labour MP with broadly ‘Lib–Lab’ affiliations, who had been elected in 1906.Footnote 6
In the years before 1914 the Liberals had not just been a free trade party, vital as that was to their political identity. The ‘New Liberalism’ of those years articulated a combination of free trade with a significant set of interventions in the labour market and in social welfare, designed to attract the urban working class. On the labour market side were the creation of labour exchanges, unemployment (as well as sickness) insurance, and trade boards to set minimum wages in some sectors of the economy. Social welfare legislation included the provision of pensions and free school meals.Footnote 7
Before 1914 this combination of international liberalism and domestic reform secured power for the Liberals, and defeated the alternative protectionist political economy of the Conservatives, while simultaneously limiting the gains of the Labour party.Footnote 8 But it came under profound pressure as a result of the First World War, with all the great export staples (textiles, shipbuilding, coal-mining, iron, and steel) weakened by the impacts of the war. After a brief boom in 1919–20, their collapse posed compelling questions about the desirability of free trade, but also about how domestic policy would respond to the plight of the people in areas affected by staple decline.
The Dundee case allows us to examine these key themes of the external and internal challenges to pre-war Liberal orthodoxies. In particular, debates in and about the city between Churchill's victory in the 1918 election and his 1922 defeat highlight the difficulties of formulating answers to the new problem of low-wage, imperial competition bringing exceptional levels of economic distress to a major industry. While the electoral problems of the Liberal party in these years stemmed from a variety of causes, not least a divided leadership and the decline of its traditional nonconformist base, this article contends that there were profound problems of political economy that the party failed to respond to effectively.Footnote 9
The first section of this article provides a summary of the city, its economy, and its politics from Churchill's first election in 1908 to the coming of war, and the second looks at the impact of the war on the city. The third analyses the external aspect, focusing on the battle between protectionism and free trade, especially in the immediate post-war years. The fourth highlights the key issue of wages and their regulation, in the context of the mass unemployment that emerged after 1920, and the fifth section deals with the run-up to the 1922 election and the election itself. The last section offers some conclusions on the wider implications of the Dundee case for the contemporary problems facing liberal political economy.
I
At the turn of the twentieth century, approximately 40 per cent of Dundee's working population was employed directly in the jute industry, but many more in the docks, on the railways, in shipping, and in merchanting were involved in buying and selling and transporting both the raw material and the finished product.Footnote 10 The term ‘juteopolis’, used of Dundee since the 1850s, accurately described its situation: no other industrial city was so reliant on one sector.Footnote 11
Imported from Bengal, raw jute was manufactured into a coarse cloth used in sacking, bags, and related products, and sold in markets across the world for the transport of the products central to the ‘first great globalization’.Footnote 12 By the early twentieth century, the strong global demand for these products had led to the rise of output in a range of European states (especially Germany) and the USA. The simplicity of the product and the unsophisticated technology used in its manufacture gave a huge competitive advantage to low-wage producers, and this meant above all the area around Calcutta, where Scottish money, management, and expertise had helped to create a machine industry capable of competing in world markets. By the 1890s, Calcutta's output had overtaken that of Dundee, and the two cities dominated world trade in the product (neither industry at this stage sold very much in the home market of their rival).
The strength of responses to this competition in juteopolis waxed and waned, partly depending upon the state of the trade cycle, which had a particularly large impact in jute. From the 1880s the local chamber of commerce debated protectionist solutions, though, as the competition in jute products was largely confined to third-country markets, the likely efficacy of such a policy was unclear.Footnote 13 Alternatives debated included the alignment of Indian and British factory acts, to try to force up wage costs in Calcutta.Footnote 14
As in many British industrial cities, so in Dundee, the predominant liberalism of the mid-nineteenth century came under pressure as the staple export trades encountered growing competition in that century's last decades.Footnote 15 Across the country there was much talk of economic ‘decline’, in many respects exaggerated, but which nevertheless for many called into question commitment to free trade.Footnote 16 However, while many industrial employers moved to conservative positions, and the Conservatives moved towards protectionism, liberalism as a political force remained predominant in most industrial parts of the country. This was the case in Dundee. Ever since the 1832 Reform Act, Dundee had had Liberal MPs (two from 1868), and, although a Labour MP was elected for the first time in 1906, he was, as noted above, very much of a ‘Lib–Lab’ disposition.
So, when Churchill won Dundee for the first time in 1908, the city was already suffering from a long-term trend of rising Indian competition, and at the time of the election the jute industry was also in one of its periodic depressed stages. Despite this context, Churchill's approach to the election emphasized the continuing case for free trade. A pamphlet made up of his election speeches made clear use of traditional rhetoric about protection threatening to ‘allow people for private profit to impose taxation upon bread and meat’, which ‘will cheat and starve your children’. In his final speech, he declaimed:
You know what would be the result of a Tory tariff reform victory … corruption at home, aggression to cover it abroad; the trickery of tariff juggles; the tyranny of a wealth-fed party machine; sentiment by the bucketful – patriotism and Imperialism by the Imperial pint … Dear food for the millions, cheap labour for the millionaire …Footnote 17
The tone of the Liberal campaign was as much anti-Tory as anti-Labour, focused on defending free trade, but also on the need for social reform.Footnote 18 Two days before the election, the Liberal government legislated for old age pensions (as well as abolishing the sugar duty), and this chimed with the Liberal claim that social reform could be funded from the proceeds of economic expansion, without recourse to tariffs. Churchill himself offered broad support for social reform in the election, defending the Liberal record on the Trade Disputes Act (which protected trade union action) and pensions, but offering little in the way of specific promises.Footnote 19
Churchill's need for a new parliamentary seat had been brought about by his move from colonial under-secretary to president of the Board of Trade.Footnote 20 It was in the latter role that he was to play a significant role in the ‘New Liberal’ social reforms. The Board of Trade had a broad responsibility for the labour market, and Churchill was to be important in the passage of the legislation on labour exchanges, national insurance, and trade boards, the last of which set minimum wages in some ‘sweated’ industries. There are divergent views about the extent and depth of his support for these policies, but there is no doubt that this was the period in his career when he was most concerned with social reform.Footnote 21
In the current context it was the support for trade boards that is most significant, given their later importance in the jute industry. On the face of it, these represented the most direct assault on liberal economic principles, giving a state body the ability to determine wages.Footnote 22 At the time, however, the scope of these boards was very carefully circumscribed, Churchill stressing that ‘these methods of regulating wages by law are only defensible as exceptional measures to deal with diseased or parasitic trades’.Footnote 23 These arguments were to be returned to in the very different circumstances of the war and post-war problems of the jute industry, a discussion picked up in section iv.
II
Juteopolis always did well in wartime. After an initial dislocation, it had flourished during the American Civil War, as jute (and linen) goods were in strong demand for tents, waggon coverings, and sandbags, as well as having peacetime uses in bags and sacking. Similarly in the First World War, after initial slack trade following the declaration of war, the industry flourished mightily; as the local Year book noted of 1915, ‘Dundee can hardly hope to have another year of such unmixed prosperity’.Footnote 24 For 1916, the summary was ‘a year of richest prosperity to the staple trades of Dundee and district’.Footnote 25 Above all, it was the demand for sandbags that drove this boom, with demand rising from less than a quarter of a million per month to more than 40 million in the course of 1915.Footnote 26
This initial boom was succeeded by a period of continuing strong demand but increasing constraints on supply, both of raw jute and of labour. Raw material imports, which had averaged 200,000 tons per annum in the last pre-war decade, rose to 295,000 in 1915, but then fell back to a low of 82,000 in 1917.Footnote 27 This fall followed the imposition of controls aimed at limiting demand for shipping.Footnote 28 Labour shortages reflected the opening up of alternative employment opportunities, as well as mobilization into the armed forces for male workers. For women, who made up the majority of the jute labour force, there were some alternatives in munitions factories, plus some hard-fought access to previous male preserves such as on the trams and trains.Footnote 29 Labour supply was supplemented by a considerable influx of workers previously in the war-disrupted fishing industry. The striking overall feature of the jute labour market was the strength of demand.
The unsurprising consequence of this level of demand was upward pressure on pay levels, with strikes as employers tried to resist labour's demands, though conceding an underlying upward trend in nominal wage levels.Footnote 30 In these conditions, the main union of jute workers, the Dundee and District Union of Jute and Flax Workers (DDUJFW), flourished, doubling its membership between August 1917 and August 1918 to reach 20,000.Footnote 31 Another feature of changes common across the wartime UK was the support of state agencies for labour in some aspects of their disputes with employers. In the Dundee case, this was most evident in the Ministry of Labour's support for the union in its disagreements with jute employers about how to respond to the limits on production brought about by shortages of raw material. The employers wanted to do this by reducing the workforce by redundancies, but with the ministry's backing the union's alternative plan of short-time working prevailed.Footnote 32
The wartime strengthening of local trade unionism in the city was matched by the strengthening of the jute employers. In 1918, they formed the Association of Jute Spinners and Manufacturers (AJSM), and this became a highly effective bargaining body, not only in relation to the unions, but also in discussion with government bodies that from the war onwards were to play a much bigger role in the industry.Footnote 33 These shifting circumstances had no immediate impact on the parliamentary politics of the city. Churchill, having been comfortably re-elected in the two general elections of 1910, was then faced with an election contest during the war, in August 1917, and in defiance of the electoral truce, when he became minister of Munitions.Footnote 34 The election was contested by the prominent local Prohibitionist and pacifist figure Edwin Scrymgeour, who had stood unsuccessfully in all previous Dundee elections back to 1908.
Churchill won a convincing victory by 7,302 votes to 2,036, albeit on a turnout of only 43 per cent.Footnote 35 The election debate focused on the war, with Scrymgeour's advocacy of a negotiated peace leading Churchill to compare him to Lenin.Footnote 36 Though Scrymgeour was a socialist, he got no support from the official Labour party, locally or nationally, while Churchill was able to claim the support of both Unionists and Labour.Footnote 37 On the other hand, Scrymgeour undoubtedly did articulate the opposition to Churchill among elements of the labour movement in Dundee. Most importantly, he was supported by John Sime, the secretary of the DDUJFW, and the single most important trade union figure in the city. For Sime, Churchill was ‘one of the last men who will do anything for the working classes, unless they compel him by vigorous action to do so’, and he cited as an example Churchill's failure to support the case for having jute declared a protected occupation.Footnote 38
III
In the war's immediate aftermath, the jute industry moved quickly into contraction as wartime demand dried up. There was also recognition that the resumption of peace was likely to revive competition, not least from India, where the wartime industry had boomed, aided by the diversion of British production from exports to war uses. In the face of these expected problems, debate over the future of the industry down to 1922 was dominated by two issues: trade protection and minimum wage regulation. Both of these were key issues for New Liberalism, and are explored in turn.
Nationally, the war had led to a considerable strengthening of protectionist sentiment, and this was also evident in Dundee. For example, the pre-war idea of a preferential export duty on Bengal's raw jute was revived at the Dundee Chamber of Commerce (DCC) in 1916.Footnote 39 This proposal was returned to again by the jute employers as the war drew to a close, in evidence given to the government-appointed committee on the position of textiles after the war.Footnote 40 Such plans had clearly been given a fillip by anti-German sentiment, as Germany had been a major jute manufacturer before 1914. This strategic approach to trade was to feed into what came to be called ‘safeguarding’, the idea that certain industries should be protected because of their centrality to war-making.Footnote 41
Also in the last months of the war, a committee was set up jointly by the AJSM and trade unions to look at ways ‘to expand the industry after the war’.Footnote 42 This was the first time that the two sides of the industry had come together in such a way, though it should be noted that this was far from suggesting harmonious industrial relations in the industry, where a significant strike occurred in the last months of the war over the length of the working week.Footnote 43 It was against this background that the campaign for the December 1918 election was fought. Churchill stood on the coalition ticket, ‘the coupon’, and was not opposed by the Unionists.Footnote 44 At the core of the election debate was the likely nature of the post-war settlement with Germany, and Churchill in his election address emphasized that it was not ‘the time for putting forward elaborate programmes of political and social reform’.Footnote 45
The coalition with the Conservatives, which had become a thoroughly protectionist party, was plainly a problem for Liberal free traders. Churchill brought to this issue a long-standing, deep-rooted commitment to free trade.Footnote 46 In his election speeches he sought to play down the significance of the issue, talking of the mandate of the government to make minor protectionist measures, and the case for preference only on existing duties: ‘It is not a question of Free Trade or Protection. It is a question of getting our daily bread.’Footnote 47 But this was to be a recurrent source of tension over the remainder of his time in Dundee, with the local Liberal Association unhappy with any slippage from complete free trade. When, in the run-up to 1922, calls for an Independent Liberal candidate were pressed, one of the criticisms of Churchill and the coalition was support for safeguarding, though Churchill vigorously defended this policy, arguing that ‘The Safeguarding of Industries Act arises directly from the resolutions proposed at the Paris conference of 1916 by Mr Asquith and Mr Runciman. It in no way affects the general principle of Free Trade.’Footnote 48 Pressed by employers on the issue of Indian competition, Churchill stressed that he was a free trader, and avoided answering directly a question about a preferential export duty on raw jute, asserting only that ‘we must have all the raw material we require before those who caused all this trouble got their share’.Footnote 49
The 1918 election saw a sweeping national victory for the coalition, and Churchill was returned with his largest majority, along with Wilkie, albeit on only a 47 per cent turnout.Footnote 50 The Unionists did not put up a separate candidate, Scrymgeour stood again as a Prohibitionist, and James Brown, the president of the Dundee Trades Council, stood for Labour.Footnote 51 Local issues, above all about the future of jute, had figured in the campaign, although Churchill's somewhat fudged responses were clearly not an obstacle to his re-election. But the condition of the industry soon came into sharper focus in the early months of 1919, as the industry's slump continued, and the AJSM successfully approached the trade unions to make a joint approach to the government in London on the surge in imports of Indian jute manufactures.Footnote 52
The route to getting such joint action was by no means straightforward. This was partly because of wrangling over union representation, with the DDUJFW hostile to the involvement of the Dundee Factory and Mill Operatives Union (DFMOU), an organization led by a clergyman and regarded by other Dundee unions as not a real trade union. More important than this was the ambivalence of the DDUJFW about what should be done in response to Indian competition. While the AJSM in 1919 was pressing the case for ‘stopping’ Indian imports, the union offered only ‘general support’ for something to be done.Footnote 53
Responding to the statement made by the employers prior to the London meeting, the DDUJFW emphasized that ‘it must not be assumed we agree with all the statements put forward by the employers on the question of Indian competition’. The unions tended to put more emphasis on the question of raising the wages and conditions of Indian workers. Thus, Sime suggested bringing in George Barnes as the government minister responsible for international labour conditions and the contemporary discussions with the International Labour Office.Footnote 54 But the AJSM view was that discussion of wages in India was beside the point: ‘such alterations of wages and hours in Calcutta would have no material effect, and what was more important, would have no immediate effect’.Footnote 55
While these discussions were going on, the DCC was continuing its pursuit of a preferential duty on the export of raw jute. It saw this issue as needing to be separated from that of Calcutta competition with Dundee: it was ‘not a purely parochial matter’.Footnote 56 When they met the president of the Board of Trade they agreed with him that what they were looking for was a duty to be used for bargaining purposes. But, as he pointed out, if it was used in this way, Britain's access to foreign raw materials might be threatened, and he noted that ‘we might come the most appalling “cropper” in Lancashire if we dealt very lightheartedly with jute’.Footnote 57 Thereafter the issue seems to have been shelved.
At the meeting with the AJSM and DFMOU, Churchill stated that
the problem appeared to him to be one of extreme difficulty, as any form of prohibition in this case would be against one of the Dependencies of the Empire, and further, any form of protection would be against the free trade principles of the Government. Although he was a strong advocate of free trade, he was not prepared to say that some modification of free trade principles would not be necessary to overcome circumstances, such as had arisen in the jute trade.
But his practical suggestion was limited to the setting up of a royal commission.Footnote 58
The following week another meeting at the Board of Trade involved the main trade unions, including the DDUJFW. Sime reiterated the call for a commission of enquiry, stressing the severity of the crisis, and ‘If nothing was done Dundee would drop from its status as the third city in Scotland and become of no more importance than Montrose’. While the enquiry was underway Sime called for government control of the jute industry in both Dundee and Calcutta. On protection Sime ‘did not suggest that imports should be restricted permanently, but until a proper solution was found restriction of imports of jute goods should be imposed’.Footnote 59
In response to these meetings, the Board of Trade announced a committee of enquiry, which would start work in Dundee at the end of May.Footnote 60 When this committee reported in December its conclusions were very clear against protection. The committee presented import restrictions as the proposal of the employers, and rejected this idea as ‘impracticable’: ‘The committee are unable to recommend artificial means to enable the United Kingdom to compete with another portion of the Empire.’Footnote 61
Turning to the unions’ proposals for equalizing competition between Dundee and Calcutta, either by raising wages in India to Scottish levels, or by imposing the same conditions as under the British factory acts, the report deemed that these were neither practicable nor likely to be effective. Wages in India were such that Dundee had to accept a significant loss of markets in the lower-quality goods; the only solution for Dundee was to ‘concentrate on the finer grade of goods and specialities not made by the Indian mills’.Footnote 62
In making its report, the committee noted that, since the spring, conditions in the industry had markedly improved, though it recognized that this improvement was unlikely to be permanent. However, across Britain, 1919–20 was a boom period of post-war ‘re-stocking’, and Dundee participated in that, helped also by specific factors relating to the appreciation of the rupee reducing Calcutta's competitive edge.Footnote 63 As was to be expected, there was disappointment among the jute employers regarding the committee's report, but its effect was to kill the issue of protectionism in Dundee jute for the time being.Footnote 64 For the next year, the industry and the city were to enjoy a period of relative prosperity that dampened the search for responses to the industry's problems.
IV
Trade boards were a key feature of the New Liberal legislation under the pre-war Liberal government.Footnote 65 The number of workers affected was quite small, and the extent of the impact on these was disputed, but for proponents the law marked the establishment of a new principle. The historian R. H. Tawney, who was actively involved in the calls for such intervention, cited the laws as a rejection ‘of the doctrine, held for three generations with almost religious intensity, that wages should be settled, as it was said by free competition alone’, declaring that it ‘is one of the most remarkable changes in economic opinion which has taken place in the last hundred years’.Footnote 66 On the other hand, the measure was supported by most Conservatives on paternalist grounds, seeing it as focused only on assisting those who were unable to help themselves.Footnote 67 The legislation faced almost no opposition in the House of Commons.Footnote 68
Churchill, as president of the Board of Trade, was responsible for piloting the legislation through government and parliament. In commending the bill to his cabinet colleagues, he stressed that the intervention would be limited to those trades where a majority of those in the trade supported legislation. He also insisted that the boards would only be introduced in conditions where wages were exceptionally low, and there were conditions prejudicial to physical and social welfare: ‘there is no danger of such principles being unwittingly accepted as the normal basis of industry’.Footnote 69 Churchill defended this departure from traditional liberal policy, urging that ‘decent conditions make for industrial efficiency and increase rather than decrease competitive power’.Footnote 70
The question of whether there should be a trade board in jute was raised at the time of the original legislation in 1909. One aspect of the drive for that regulation was the especially weak position of women workers, and the women's trade union activist Mary McArthur had made the case for a board in jute to protect workers who sewed sacks, who were usually women:
Mr Churchill, it was to be hoped, would not forget the jute workers, for not only was the jute trade one of the lowest paid of the staple trades of the Kingdom, but there was also a considerable amount of sack-sewing, which was even worse paid than the jute trade.Footnote 71
There is no evidence that, at this time, the unions in jute pressed for a board.Footnote 72 There is also no evidence of Churchill explicitly rejecting the case for jute's inclusion at this time, but, as noted above, he was keen to emphasize the narrow scope of the proposed legislation: wages had to be ‘exceptionally low’ and ‘conditions prejudicial to physical and social welfare’.Footnote 73 Civil Service comment on the proposal concentrated on its likely effect on bag-sewing, work largely done at home by women, and suggesting ‘It is unpleasant work and therefore done by very wretched people. I don't know that a Trade Board would be of any use; there are so many other forces at work to produce misery.’Footnote 74 A proposal by the MP for Montrose, Robert Harcourt, to include jute and linen in the industries covered by boards was opposed by the Dundee Chamber of Commerce, and subsequently dropped.Footnote 75
The scope of trade boards was widened during the war, and the legislation was extended in 1918. Where the original law had been fundamentally concerned with the level of wages, hence ‘sweated industries’, the extension, in line with early post-war thinking, focused on the degree of organization of an industry.Footnote 76 The idea of a trade board in jute resurfaced in August 1918, when Sime said that he was surprised at the idea, given the high level of unionization in the industry, but welcomed the proposal.Footnote 77 The matter was under active discussion by the AJSM by November 1918, and their initial stance was surprisingly favourable, seeing it as a way of regulating wages at a time of exceptional industrial unrest.Footnote 78 Employers were assured by the Board of Trade that a trade board did not involve suggesting that jute was a sweated industry, and further reassurance was offered that a minimum wage would not be set until conditions had settled down.Footnote 79
The board was established at the end of 1919, and set the first minimum wage in June 1920, coinciding almost exactly with the peak of the post-war boom.Footnote 80 In February 1921, the employers called simultaneously for a wage cut and the abolition of the board, part of a co-ordinated push by employers against wage regulation, and also part of the strong political drive for ‘de-control’.Footnote 81 At this time, the union was still calling for a wage increase, but eventually, despite its opposition, a 12.5 per cent cut was agreed by the board to take effect in September 1921 (further cuts followed down to 1923Footnote 82). Before that happened, in February of the same year, the AJSM had approached the Board of Trade to press for abolition. Even when the September cut was secured, it regarded this as inadequate and pressed for further action, succeeding in getting a further reduction agreed that would take effect in February 1922.Footnote 83
When the AJSM approached the Ministry of Labour on abolition, they argued that the workers were well organized and did not need a board to defend their interests, and that the present level of wages set by the board was causing unemployment.Footnote 84 Senior figures in the ministry took a robust view of the employers’ case. A memorandum on the subject noted that the wages set by the jute board were almost the lowest fixed by any trade board in the country; moreover, the document cited an expert's view that ‘the simple fact is that there is no market whatever for the manufactured article, and that if wages were reduced to zero it would not affect the position in this respect at all’, going on to say ‘it is clearly, therefore, an attempt of the employers to use the slump for breaking down the Trade Board system which, as almost the worst employers in the country, they have always resented’.Footnote 85
The rejection of the employers’ case by the ministry, formally notified in April 1921, led them to approach Churchill in the summer of 1921, and in turn he approached the Ministry of Labour.Footnote 86 In response to him, a senior official in the Board of Trade staunchly defended the board's role against the view that the industry was in principle one to which the legislation should not have been applied, and that its application was causing unemployment. On the first point, it was argued that, even without the recent fresh legislation, jute would have fallen to be regulated under the 1909 Act, as its wage levels showed it to be a sweated industry. On the second point, he stressed that the wages set by the board were linked to changes in the cost of living, and that with the recent price fall a cut in wages was under consideration. The further argument was made that, in the absence of alternative local employments, the jute workers were in a very poor bargaining position, and therefore they and their unions needed a board to have any effective power. Finally, it was asserted that the problems of the jute industry were of such a magnitude that a cut in wages of any plausible scale was unlikely to affect the employment level much.Footnote 87
The DDUJFW strongly resisted the call for abolition of the board, and stressed not only the benefits to the workers, but also the previous willingness of the AJSM to use the board to get agreement on difficult issues in the trade. It was clear to the union by this time that the deflation in the economy was going to lead to strong pressure from the employers for wage reductions.Footnote 88 Churchill came out strongly in support of the employers’ case for abolishing the board. Writing to the prime minister in September 1921, he said
as you will know, I was originally the author of this legislation, but over and again to Parliament I declared that it was to be confined to parasitic trades, and that no trade that was capable of forming an effective trade union should be subjected to this special and invidious control. The original bill has now been extended to all sorts of trades to which it is wholly unsuited, including the powerful Jute trade in Dundee.
He also argued against wage minima on the grounds that ‘the trade itself is under competition from India. The capital sunk in the Indian mills was not subject to the British income tax or Excess Profits Duty … Behind them stand relays of Indian labour capable of earning less than one third of the present wage scale.’Footnote 89
Around the time of Churchill's letter, the local Unionist newspaper, the Courier, mounted a vociferous and persistent campaign against the trade boards. Editorials on 3, 17, 20, and 29 September 1921 supported the call for abolition. In the last of these, the paper attacked the trade unions for their support of the boards, charging that this was inconsistent with the unions’ professed concern with unemployment.Footnote 90 The union position was complicated by Sime's exclusion from the board, because of alleged misbehaviour, but this did not undermine their support for the principle.Footnote 91 In April 1922, the newspaper's critical commentary continued, suggesting that the Cave Committee, which had reviewed the operation of the trade boards, had all but recommended their abolition, and that the Board of Trade should now move to abolish them.Footnote 92 An editorial close to the 1922 election, on 28 September, characteristically suggested that the boards had ‘proved a complete and costly failure’, above all in increasing the level of unemployment.
Unemployment was the key issue in Dundee in the early post-war years. After the post-war boom of 1919–20 it rose rapidly to a peak in the winter of 1921–2, reaching perhaps 30 per cent in the jute industry.Footnote 93 Both the parliamentary and popular politics of unemployment, here as elsewhere in Britain, primarily focused not on its reduction, but on the relief offered to those who suffered from its effects. In September 1921, Dundee saw a serious breakdown in public order as jute workers’ entitlement to national insurance payments became exhausted, and the parish council announced that it was unable to extend the operation of outdoor relief.Footnote 94 This kind of localized, rowdy street politics was to be increasingly eroded by the rise of national politics and campaigns, and unemployment relief was to become a ‘nationalized’ issue later in the interwar period as parishes and poor law boards lost control of relief, partly as a response to the effectiveness of the local protests.Footnote 95 In Scotland, and in contradiction to the law, outdoor relief to the able-bodied was granted, and in late 1921 central government had indemnified local parish councils against potential action by disgruntled rate-payers.Footnote 96
This was not the first outbreak of unrest. In September 1919, Churchill had postponed a meeting in the city because of fears of such rowdiness interrupting his public meetings, and the following year similar issues were discussed between him and the president of the Liberal Association, George Ritchie, especially in relation to disturbances led by unemployed ex-service men.Footnote 97 Partly because of the disruptive effects that protests about unemployment had on the conduct of parliamentary politics in Dundee, Churchill was active behind the scenes on this issue. When Sir Montague Barlow reported to him on the situation in the city later in 1920, the focus was still on unemployed ex-servicemen, for understandable political reasons. Barlow's report fed into a cabinet-appointed committee on unemployment, which Churchill encouraged the creation of, and which explicitly discussed the situation in Dundee.Footnote 98
But with the slump in 1921 the unemployment situation greatly deteriorated. By April of that year, fears of unrest led Ritchie to advise Churchill against holding a public meeting in the city. In September, against the background of the protest against the parish council noted above, Churchill was again worrying about disruption to possible meetings.Footnote 99 But he was also urging action by the prime minister on the unemployment issue. This was done in the same letter already cited, in which Churchill attacked the jute trade board. It began by saying that ‘My discussions here have convinced me that there are very great grounds of complaint against the government's policy on unemployment.’ Again, ‘policy on unemployment’ meant policy on its relief, with Churchill arguing for an extension of national insurance provision to avoid more of the unemployed becoming reliant on the parish councils (who were responsible for poor relief in Scotland until 1929). He linked this to the trade board issue by claiming that the wages they set were a major cause of unemployment, and therefore the cost of their actions was falling on the public authorities responsible for unemployment relief.Footnote 100
In this same letter, Churchill asserted that ‘he certainly did not identify himself with the employer point of view’.Footnote 101 But, by opposing trade boards, he had aligned himself clearly with the Unionist opposition and in clear contradiction to the position of the local trade unions. And, while he was certainly active in encouraging a positive response to protests about unemployment relief, the very focus on this issue suggested a degree of giving up on any policy to address the possibility of increasing employment or finding a way to ameliorate the jute industry's plight.
V
As shown in Table 1, the election of 1922 was a clear defeat for Churchill. The victors were a Labour candidate, E. D. Morel, and the Prohibitionist, Edwin Scrymgeour, who was otherwise (broadly) a Labour supporter. These two represented diverse strands of the new combination that was underpinning the electoral growth of the Labour party.Footnote 102 Morel was a cosmopolitan intellectual with no ties to Dundee, famous for his role in exposing the extraordinary excesses of King Leopold of Belgium's rule in Africa, a founder of the Union of Democratic Control who had spent six months in prison for activities related to his opposition to the war. He had been a Liberal candidate for Birkenhead until his opposition to the war led to his resignation on December 1914, after which he moved increasingly towards the Labour party.Footnote 103
Results of the 1922 election in Dundee
Source: Southgate, ‘Politics and representation’, p. 302. Note that, as Dundee was a dual-member constituency, each voter had two votes.
Scrymgeour was a very well-known local man, a long-serving city councillor, whose prohibitionism (and abrasive Christianity) had complicated but not ultimately prevented him becoming accepted as a representative of the labour voice in Dundee, though not endorsed by the Labour party. In his idiosyncratic way he was undoubtedly part of the radical movement to the left in Scotland, symbolized above all by ‘Red Clydeside’.Footnote 104 The newspaper that Scrymgeour edited, the Prohibitionist, celebrated the outcome of the 1922 election as both ‘Britain's first Prohibitionist MP returned with a marvellous majority’ and also ‘Accompanied by Morel, thus achieving Labour's double victory’.Footnote 105 His peculiar appeal is suggested by the data we have from this dual-member constituency, which shows that more than 5,000 of his voters were ‘plumpers’: people who did not use their second vote, but gave one only to him.Footnote 106
The most detailed discussion of the immediate causes of this electoral outcome identified four ‘principal agencies of opposition to Churchill’: the ‘Dundee Irish, the Jute and Flax Worker's Union, the Prohibition Party and, late on the scene, the Communist Party’.Footnote 107 The Irish hostility to Churchill was linked to his prominent role in the battle over Irish independence leading up to the 1921 treaty, and the widespread support in Dundee for the anti-treaty Sinn Féin. Sufficient support to elect an MP made the Prohibition party a Dundee peculiarity, though prohibitionism was a popular cause in Scotland in the 1920s. The party may also have been important as a mobilizer of (newly enfranchised) women, as we know that women were disproportionately in favour of the teetotalist case.Footnote 108 Finally, there was the legacy of Churchill's equivocations over the enfranchisement of women dating back to the early 1900s. In the Edwardian years he had ‘developed a very personal antipathy to women's suffrage ever since the militants began interrupting his perorations’.Footnote 109
The strength of support for the newly formed Communist party is notable, and reflected the strongest form of rejection of the old liberal political economy. The party was closely linked to the ‘street politics’ noted above, but, while this may have gained it some support from those most hostile to ‘respectable’ parliamentary politics, it may also have meant that the working-class vote was less divided than in 1931, when the Communist vote reached its peak at over 10,000.Footnote 110
The DDUJFW's position had hardened against Churchill, and this reflected his perceived indifference to the plight of the city, with Sime frequently arguing that Churchill paid little attention to his pleas for assistance.Footnote 111 The basis of this claim, and the broader issue of Churchill's alienation from the organized working class in the city, is returned to below. But another important factor in Churchill's loss of support was the division in Liberal and Conservative politics which helped to divide the vote on the anti-Labour side – what has been called ‘the utter disarray of the Right’.Footnote 112
Discontent over the fiscal stance of the coalition was a recurrent feature of Churchill's correspondence with Ritchie. As early as May 1919, Churchill was complaining to him that
least of all do I think there is good ground for complaint from Liberals in regard to the Budget, which lays its only increase of taxation on alcoholic liquors and death duties. I regard, and have always regarded, the giving of Preference to the Dominions on existing duties as a very small matter so long as there is no question of the protective or preferential taxation of food.Footnote 113
These two linked issues – taxation and protectionism – were key to a growing wedge between Churchill and the Liberals in Dundee. While the coalition eventually launched a major reduction of public spending (‘the Geddes Axe’), ‘old-style’ Liberals wanted action sooner and sharper.Footnote 114 And, as noted already, belief that the Tories’ protectionist instincts were not being sufficiently resisted was a recurrent source of contention. Churchill's political tactics were clear long before the 1922 election. Writing to Ritchie in September 1920 about speeches during a forthcoming visit to Dundee, he commented ‘My object, of course, will be to promote the unity of anti-socialist forces, and I shall be glad of any facts which will give me guidance as to the local situation in regard to this.’Footnote 115
In the summer of 1921 he welcomed the selection of a second (pro-coalition) Liberal, David MacDonald, urging ‘We ought at an early date in the Autumn to have a joint meeting at which Mr MacDonald and I would both be present. The lines of cleavage against the two Bolshevik and Labour candidates could then be clearly drawn.’Footnote 116 Churchill's focus on the menace of socialism was a bone of contention with lots of Dundee Liberals, many of whom regarded the Conservatives as the bigger enemy, with their espousal of protectionism. Their fears were clearly justified, as by early 1922 Churchill was in correspondence with the Dundee Unionist Association, not only extolling the virtues of the coalition but also floating the idea of a new National party, for which anti-socialism would be the foundation.Footnote 117
Key problems of Churchill's stance can be seen in the politics of his running mate. MacDonald was a strong supporter of retrenchment, and urged on Churchill the need to emphasize this in trying to maintain Liberal support.Footnote 118 While he was allied with Churchill, his enthusiasm for retrenchment made him seem like an old-fashioned Liberal, happily and explicitly embracing the slogan of ‘Peace, retrenchment and reform’. For him, retrenchment would involve, for example, an end to national insurance against unemployment, leaving this provision to trade unions and friendly societies. But, while this could be seen as extremely conservative positioning, he also prioritized retrenchment over anti-socialism, regarding the Conservatives as the real obstacle to retrenchment.Footnote 119 By contrast, while also emphasizing retrenchment, Churchill argued that this was one of the big issues upon which Unionists and Liberals were united.Footnote 120
This confusing amalgam of policy and polemical stances was accompanied in the months leading up to the election by organizational problems among Liberals in Dundee. Ritchie died in late 1921, to be succeeded as president by Joseph Philip. Philip resigned in April 1922, to be succeeded in turn by J. C. Robertson. Churchill never re-established the degree of accord with the local Liberals that had existed with Ritchie in post. More obvious was the split in Liberal ranks over their attitude to the coalition and to Churchill. In the summer of 1922, a vote on whether to support his candidature was passed by eighty-one votes to forty-one. Those in the minority formed a Dundee Liberals Committee, motivated especially by hostility to safeguarding and government extravagance. They brought in an Independent Liberal candidate, Robert Pilkington.Footnote 121
The 1922 election in Dundee was a spectacle of ‘mutual and unedifying bitterness’, in which characteristics much of the running was made by Churchill and his allies on the one side, and the Communists on the other.Footnote 122 Churchill's tactic was to patronize Scrymgeour as honest but deluded, but to treat Morel as a crypto-Communist: ‘Mr. Gallacher is only Mr Morel with the courage of his convictions.’Footnote 123 This line of polemic may be seen as being as miscalculated as Churchill's famous speech in the 1945 election, linking a Labour government to the Gestapo. Not only was Morel a long way from being a communist, as Lenin recognized in characteristic terms: ‘Morel is a bourgeois, whose talk about peace and disarmament is a lot of empty phrases.’Footnote 124 But attempting to label him as such showed how far out of touch Churchill was with the local popularity of someone whose long history of anti-militarism, including six months in prison for his anti-war activities, had considerable resonance in the city.Footnote 125
VI
By disrupting international trade, the First World War accelerated the industrial development of poor countries, especially in Asia, significantly changing the international division of labour. Textiles were at the core of this shift.Footnote 126 Most significant for Britain was the upsurge of Indian manufacturing, reflecting the key role of textile production in that country.Footnote 127 Cotton was central to the shift, with the loss of Britain's market share in the Indian market the single most dramatic, immediate commercial consequence of the war.Footnote 128 While a much smaller industry, the effects of the war on jute were even more striking, with Dundee's home market being entered by Indian producers on a substantial scale for the first time.
This wartime disruption was not to a pattern which had previously been unchanging. Indian producers had been making gains at their British competitors' expense in both cotton and jute well before the war, though in the former case a loss of market share was compatible with a continuing absolute increase in trade. In jute, total output faltered even before 1914.Footnote 129 By disrupting shipping and raw material supply, as well as production and sale of the final product, the war fundamentally shifted the relative positions of Dundee and Calcutta, and henceforth the former was never going to recover.
At their broadest, these changes involved a profound challenge to the whole architecture of the international economy, and especially to Britain's pre-eminent role within it. The gold standard and free trade regime were now under pressure as never before. These issues were to dominate the national economic policy agenda until the crisis of 1931 radically undermined them both.Footnote 130 But alongside this new macroeconomic fragility were the particular problems of those industries and areas most affected.Footnote 131 All of the old export ‘staples’ were in serious difficulty, but, as suggested above, jute was exceptional in the degree and urgency of its difficulties, combined with the peculiar problem of penetration of the home market by a low-wage producer. This was the context for the politics of Dundee.
Looking back from 1930, Churchill argued that great change had come over public life with the war: ‘the issues are not political; they are economic … what [the nation] now asks for is more money, better times, regular employment, expanding comfort, and material prosperity’.Footnote 132 In that light, what seems clear is how far Churchill's approach to Dundee in the four years after the war failed to offer any coherent vision of how prosperity might be restored in that city.
On the question of competition with Calcutta in jute, Churchill largely stuck to the norms of pre-war liberalism and its foundational commitment to free trade, albeit he was willing to concede a small amount of ground to the imperatives of safeguarding. In a speech in April 1922, he argued that
The old disputes of Free Trade and Protectionists had no application to present conditions. It was not foreign imports or foreign competition that was injuring this country as a whole, though to a certain extent foreign competition was injuring Dundee. It was the failure of our export trade owing to the collapse of foreign markets.Footnote 133
In fact, foreign competition was harming Dundee more than ‘to a certain extent’. Protectionism would have been at best only a limited help, but, in the crisis circumstances of the early post-war years, Churchill's unwillingness to respond positively to the DDUJFW's call for some action on this front was one important step in alienating trade union opinion. As we have seen, there was, at least briefly in 1919, some chance of building on joint employer–trade union pressure on this issue, but the moment was allowed to pass.Footnote 134
Ironically, both Morel and Scrymgeour were anti-protectionists, and showed no sign of following the (equivocal) deviation by the main jute union into the protectionist camp. Before the war, Morel had been a strong proponent of free trade, like most Victorian radicals believing that it was the route to international peace. In addition, his work on the Congo led him to believe that free trade between free peoples was the best route to development in Africa.Footnote 135 However, Morel is typical of those on the left who, as Trentmann emphasizes, stuck largely to anti-protectionism but ceased to see free trade as any kind of panacea, and started to talk about the need for trade ‘regulation’.Footnote 136 What Morel certainly did not do, unlike Churchill, was put forward free trade as part of a conservative programme of retrenchment, following the old Liberal logic that, in the absence of tariffs for revenue, sound policy required tight limits on public spending, lest the weight of other taxes (especially on income) placed an unacceptable burden on the citizenry.
Churchill was right that the meaning of free trade had shifted. For most people on the left, it had become even more of a political issue, closely linked to pacific attitudes to international relations. Conversely, it had become less significant as an economic issue in the pre-war form of a guarantor of cheap food.Footnote 137 In Dundee, as elsewhere in wartime Britain, a new politics of consumption had arisen, often spearheaded by women, and taking both official and unofficial forms.Footnote 138 This had focused attention much more on state regulation as the route to cheaper and more adequate supplies of food with, as Trentmann suggests, milk as the commodity typically focused upon.Footnote 139 The Dundee Food Control Committee was established in August 1917 and was consistently under pressure from Labour and Co-operative interests in the city over its alleged failure to adequately control prices.Footnote 140
For Churchill, on the other hand, advocacy of free trade seemed to have little relationship to his assertive international stance, not least on Russia, where his attitude had alienated working-class support far beyond the Communist party. On the left also, free trade was combined with support for improving wages and conditions of jute workers in Calcutta.Footnote 141 However utopian this strategy may have been (and impractical as a way of dealing with Dundee jute's problems), it detached free trade from the conservative trappings that it acquired after 1918 in the hands of Churchill and his allies.
When Morel first accepted the candidacy for Dundee in 1920, he emphasized that his focus of attacks on Churchill would be foreign policy.Footnote 142 This issue certainly dominated his campaign. But he linked foreign policy explicitly to Dundee's economic difficulties, arguing that the instability of the world was encouraged by Churchillian-style belligerence, which in turn reduced trade and hence employment in export industries such as jute.Footnote 143
As noted above, when, in September 1921, Churchill wrote to Lloyd George criticizing trade boards, he linked this explicitly to Indian competition. But, while clearly characterizing Indian competition as ‘unfair’, he suggested no remedy for this problem, beyond wage reductions in Dundee.Footnote 144 His position was certainly not born out of any sympathy for the efforts of India to industrialize; he was especially opposed to allowing such efforts to be aided by tariffs. In 1919, as part of his resistance to any idea of greater self-rule for India, he wrote ‘It seems to me monstrous that India should be allowed to put on a protective tariff against British goods while Britain herself remains a free trade country.’Footnote 145
The politics of the trade board issue were more straightforward than those of free trade. Here it was a case where Churchill lined himself up with employer and conservative forces, and against the explicit support of the unions for the continuation of the board, a support endorsed by Morel and Scrymgeour. The political issue was not just the immediately compelling one of trying to find a mechanism to support the wages of Dundonians against the bargaining power of the employers, in the context of a slump. More broadly, the extension of trade boards was part of the wartime advance of the bargaining power of workers that, unsurprisingly, organized labour regarded as the fruits of their commitment to the war effort, and this made their significance extend beyond their (problematic) practical effects in sustaining wage levels.
Overall, Churchill had nothing to offer on the economic issues facing juteopolis. While he was willing to work to ease the pressure on the local authority to pay unemployment relief, for the jute industry itself he could only offer support for the employers’ drive to end the wage board and allow unconstrained wage cuts. He opposed protectionism, and when doing so made the understandable but unhelpful comment in a meeting with the jute unions that, ‘where competition was between peoples living under wholly different modes of life, Government would have to formulate principles of equity and economy for regulating such competition; these principles were not at present apparent to him’.Footnote 146
This was a counsel of despair in the face of the shifting international division of labour. But that kind of shift was one that free trade doctrine had never anticipated. As Peter Clarke has pointed out, as far back as the tariff reform controversy, in 1903, Churchill had recognized that international competition would force shifts in activity in ‘old industrial countries’ like Britain. Echoing Alfred Marshall's analysis, he had asserted that it was under free trade, ‘where readjustment of labour and redistribution of capital are more easy, where enterprise is more varied and elastic’, that the best results could be expected. But for both Churchill and Marshall the context for such analysis was competition from countries such as Germany and the USA, a slow encroachment on British producers by other sophisticated industrial nations. Such understandings were of little help when competition was from low-wage producers, and in parts of Britain where the idea of a ready transition to what Churchill called ‘the more complicated and secondary processes of manufacture’ was so remote.Footnote 147
As Clarke suggests, and as was to be so clearly demonstrated during his tenure as chancellor of the Exchequer between 1924 and 1929, Churchill's economic ideas had been formed in the late Victorian/Edwardian heyday of the unmanaged economy and had limited purchase on the economic problems of Britain after 1918.Footnote 148 This was particularly evident in relation to Dundee, which had become an unwitting victim of a shift in the international division of labour. There were no easy remedies for this situation, and Churchill's bafflement is understandable. But the positions he did take in response to these problems, and the baggage they carried with them, were in retrospect almost designed to alienate the organized working-class electors of the city.
Churchill's political trajectory from pre-war Liberal to soon-to-be Conservative had, of course, its idiosyncrasies. But the problems he faced in Dundee were an extreme form of those generally faced by Liberals in post-1918 Britain. Collapse of staple export industries rendered the pre-war Liberal combination of free trade and inexpensive social reform unsustainable. Whereas a painful and prolonged shift away from free trade and liberal internationalism towards a ‘national political economy’ was beginning on the socialist left, liberal political economy in this period showed little sign of coming to grips with the new economic realities.Footnote 149
