GREAT BRITAIN: Coalition

Early last Sunday afternoon little knots of people began gathering in front of Buckingham Palace and No. 10 Downing St. The little knots grew until Downing Street had to be cleared by police. The crowds overflowed into Whitehall and down to Trafalgar Square. They were anxious but good-humored. Each Cabinet Minister as he arrived was greeted with shouts: "Good Old Snowden!" "There's Jimmy! Gor Blimey!"

Darkness fell, the crowds stayed, still growing. As tenseness increased an immaculate young man with a monocle in his eye, yellow gloves and tight rolled umbrella firmly gripped in his hand, inspected the crowd with amazement and standing next to a United Press correspondent, hailed a policeman:

"I say! What's it all about?"

What It Was About. The Labor Government of Ramsay MacDonald was faced last week with the almost impossible task of balancing a budget with a deficit of some $583,000,000* (TIME, Aug. 24).

There were three ways out:

1) Increased taxation. Britain is already the heaviest taxed nation in the world. The British camel can stand few more straws.

2) A tariff. Britain is the traditional home of free trade. Most of her food must be imported. No government has been able to stand after threatening to increase the nation's food bill.

3) Economy. This was the obvious solution. The MacDonald Cabinet tackled it manfully. As a first step last week the War Office and the Admiralty sent telegrams to all military and naval commanders, the chiefs of the air force, suspending immediately and until further notice all contracts for military works. But here again the Laborites ran against a stone wall. Britain's great extravagance is the Dole. Liberals, Conservatives, businessmen, were demanding that it be cut. Trades union leaders and left-wing Laborites cried just as loudly that if the Dole was cut they would desert the party, kick out the Government. Cabinet meetings went on day after day. On a final Dole vote, right and left Laborites split 12 to 8, Foreign Minister Henderson and First Lord of the Admiralty Alexander leading the Left.