GREAT BRITAIN: Coalition

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Lombard Street Pressure-British bankers brought on the crisis. Last week the world was told that the £50,000,000 ($243,000,000) Franco-U.S. credit to the Bank of England, largest credit the Old Lady of Threadneedle Street has ever needed, had been nearly exhausted. Moreover, of the credits totaling some $1,200,000,000 (just about the same as Germany's), many will expire in October and must be renewed if sterling is not to collapse. French and U. S. bankers would not renew Britain's credits until they were assured that Britain's budget would balance. A tariff and a cut in the Dole are the only ways the budget can balance, but no single British party is strong enough to enact such measures. Only a Coalition Government could do it. About the time that Lombard Street board rooms were figuring this out, fox-bearded Montagu Collet Norman left Great Britain for Canada with a nervous breakdown. Governor Norman has been in increasing ill favor with a section of the British Press. Editors were recalling the enormous influence he has exerted during the eleven years he has been Governor of the bank. Montagu Norman went to Quebec which is 550 miles from Wall Street by rail, $2.45 by telephone, and left behind square-jawed Sir Josiah Stamp, long the Bank of England's No. 2 man, little known Sir Ernest Musgrave Harvey as Acting Governor.

The King. King George arrived at Balmoral last week for a three-week holiday. It rained continuously. Suddenly, only two days after arriving, the King Emperor put away his kilts and gave up all thought of vacation. He rode all night to London in a special train. At Euston Station, Sir Josiah Stamp was waiting for him with his hat in his hand. King George emerged from the train, grim-faced in a black bowler, black overcoat. Sir Josiah joined him at once and, as the two walked slowly through the station to the royal limousine, delivered to his sovereign a short, grave report on the state of British finances. All that afternoon and evening leaders of all three British parties were summoned to conferences at Buckingham Palace. Just as in 1911, as in 1914 at the height of the Irish troubles, King George was being the ruler of Britain.

Meanwhile the crowds were gathering in front of the palace and at Downing Street. Scot MacDonald emerged to call on his King. "Any statement, Mr. MacDonald? Any statement?" asked the thronging reporters.

"Yes," said the Prime Minister, "I am . . ."

He changed his mind and stepped into the car. As it drove off Ramsay MacDonald took off his hat and buried his face in his hands.

Coalition. At 5 o'clock the next afternoon the news broke. Ramsay MacDonald had tendered his resignation and that of his Cabinet. It had been accepted. Immediately he was called upon by King George to form a new Coalition Cabinet, including members of all three parties. Scot MacDonald bowed his grey head and kissed King George's hand.