AT the opening of 1925 the principal problems which faced the Government were those of unemployment and agriculture. In the absence of any trade revival, the number of unemployed still stood at well over a million, a figure which on all hands was regarded as disquietingly high. There was also general agreement that an extension of arable farming on the soil of England was vitally important for the welfare of the nation. The King's Speech had naturally laid stress on these two problems, and the Government had to some extent staked its reputation on finding a solution for them, especially for the latter. In addition to these problems, the Government had inherited from its predecessor two others which, though not so urgent, were also of considerable importance. It was recognised as highly desirable that there should be improved means of consultation between the Dominions and the Mother Country, and that the settlement of inter-Allied debts should be expedited.

The debate on the Address in the closing session of the House of Commons in 1924 had shown that the Government possessed the full confidence of the Conservative Party which formed the great majority of the House. Within the Cabinet also Mr. Baldwin's leadership was loyally accepted, even by those who had at one time shown an inclination to pose as his rivals. The Premier, in consequence, was free in a way in which his predecessor had not been to devote his whole attention to national as opposed to purely Parliamentary problems. This advantage, however, did not enable him to achieve any greater success in their solution.

One of the first steps which the Government had taken after

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coming into office had been to issue invitations to unions of landowners, farmers, and agricultural labourers to join in a conference on agricultural problems under Government auspices. The landowners had agreed immediately. The farmers, after raising difficulties, had at length before the end of the year accepted the invitation. The labourers delayed their reply even longer, and gave it finally in a sense hostile to the proposed conference. The National Union of Agricultural Labourers sent in their refusal in January, and the agricultural section of the Workers' Union a few weeks later, after first consulting with the Executive of the Labour Party. The Government was gravely disappointed with the action of the workers' unions, which for the moment nonplussed its endeavours to improve the condition of agriculture. It was pressed by many of its supporters to adhere to its purpose of calling a round-table conference even without the participation of the unions, but after weighing all the circumstances reluctantly abandoned the idea. The Minister of Agriculture, however, announced his intention of consulting interested parties and receiving suggestions from all quarters.

In another field also the Government was checked by Labour's refusal to co-operate. Early in the year an Army Order, which had been signed some months before by Mr. Walsh, when Minister' of War in the Labour Government, was issued inviting railwaymen to enter the Supplementary Reserve, with liability to be called out "when the Army Reserve or any part of it is called out by Proclamation.' It was stated that the purpose of the measure was purely to enable mobilisation to be made more rapidly in time of war, and, in fact, the Order contained an express statement that the liability to be called out in aid of the civil power would not be enforced-in other words, that the reservists would not be used as strike-breakers. Unluckily for the Government, the Army Order was accompanied by a circular from the railway companies, which contained the statement that, once men in the Supplementary Reserve had been called out on permanent service, or were otherwise subject to military law, they were in the same position as men of the Regular Forces in the matter of their being ordered to assist the civil power. The suspicions of the railwaymen were aroused, and the National Union of Railwaymen advised its members, on January 12, not to enlist pending a satisfactory explanation being given by the Government. The intractable spirit displayed by Labour was viewed with grave concern by the Premier, who made the need of a better spirit in industry the burden of several speeches early in the year.

During the London Conference on Reparations in 1924, Mr. MacDonald had emphasised the need of some machinery for securing closer co-operation between Britain and the Dominions in the field of foreign policy, and the Labour Government before it left office had taken some preliminary steps to bring about a confer

ence to consider this matter. The Conservative Government, which was equally favourable to the idea, had all the more reason for prosecuting this design, as it was faced with the task of framing with the Dominions a joint resolution on the Geneva Protocol presented for its consideration by the League of Nations. Inquiries were accordingly made of the Dominions whether they could send representatives to a conference before the League of Nations met in March to discuss the Protocol. All for one reason or another answered in the negative, and on January 20 the Government found itself compelled to announce that the idea of a conference had been abandoned, and that the only course open was to endeavour to arrive by correspondence at a conclusion on the issues involved--a method which was admittedly cumbrous and unsatisfactory.

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The Conference summoned at Paris early in January to consider the Reparations situation afforded Mr. Churchill, who was the British delegate, an opportunity of raising with the French Government the question of the French debt to England. Hopes had indeed been expressed in Parliament during the debate on the Address that he would bring this question nearer to a settlement. Mr. Churchill was in Paris from January 6 to January 14, and found little difficulty in coming to an agreement with his Belgian and French colleagues on the actual questions before the ConferThis was partly because he showed a complaisance with the French view which was hardly in the spirit of the policy of Mr. MacDonald. In spite of Britain's repeated declaration that it considered the Ruhr occupation as illegal, he not only consented to France's charging Germany with the cost, but also to receive a part of the proceeds on behalf of England. He also assentedafter "lively and prolonged conversations," as he subsequently explained-to America receiving reparation payments under the Dawes scheme, an idea to which the Government had at first been strongly opposed, justifying himself on the ground that the new arrangement would make things easier for America's debtors for the next few years.

On the question of inter-Allied debts, Mr. Churchill had informal conversations with M. Clémentel, the French Finance Minister, which did not advance matters to any appreciable After some discussion, M. Clémentel sent a letter asking three questions-Did the British Government hold to the spirit of the Balfour Note; could it give the French Government a written assurance to that effect; and, if the British could not accept the Balfour Note without modification, what modification did it consider necessary? The Cabinet referred the questions to the Treasury, and as a result of their consideration of the matter, Mr. Churchill, on February 6, sent a memorandum to the French Government containing certain suggestions for the funding of the French debt, The main point of his proposals was that the

payment should be made partly by means of a fixed annuity, to be paid independently of any sums received from Germany, and partly by a variable annuity consisting of a percentage of receipts from the Dawes annuities. The French Government showed itself willing to consider this proposal, although it conflicted with the principle hitherto adopted by France, that French payments should be wholly dependent on German payments, and on April 1 two permanent officials of the French Treasury came over to London to discuss with officials of the British Treasury certain questions arising out of the Churchill memorandum, in particular the total sum to be funded. On the very next day, however, M. Clémentel, the French Finance Minister, resigned, and in the Cabinet crisis which followed in France the question of funding the debt was put aside for a time.

While Parliament was in vacation, the Liberal Party in the country continued to make strenuous efforts to pull itself together after the knock-down blow which it had received at the General Election in October. The Committee which had been appointed by Mr. Asquith, soon after the election, to investigate the condition of the party, framed a Declaration of principles and policy which was communicated to Liberal Associations throughout the country, and a Convention was summoned to consider it on January 29.

The Convention was preceded by some ominous bickerings within the party. On January 17, at a Liberal meeting held at Bristol, the Chairman, Lord Strachie, stated that a leaflet on the Liberal rural land policy, which had been circulated in large numbers during the election campaign, had not had the sanction of the Shadow Cabinet of the Liberal Party, and had been issued by Mr. Lloyd George practically on his own responsibility. He also gave it as his opinion that the Liberal land policy, as explained by the Liberal Publications Department, had done considerable harm to Liberalism in the West of England. Mr. Lloyd George, in a letter to Lord Strachie, stated that the manuscript of the leaflet in question had been approved by Mr. Asquith, but did not deny that it had not been seen by the Party Whips, or that the whole land policy had been launched on the party without warning.

A further embarrassment was at the last moment sprung on the Convention. A couple of days before it was due to meet, the announcement was made that the King had approved of the dignity of an earldom being conferred on Mr. Asquith. This meant that the Liberal leader had definitely given up the expectation of returning to the House of Commons (to which he had failed to secure election in October). The prospect of a Peer as leader of the party was viewed with apprehension by many Liberals, and rumours immediately became rife that Mr. Asquith would resign the leadership as soon as he entered the House of Lords, if not earlier.

In spite of these somewhat unfavourable preliminaries, the