The History of Hugh Dalton, The Right Honourable Lord Dalton PC

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Chancellor of the Duchy of Lancaster

In office: 31 May 1948 – 28 February 1950

Chancellor of the Exchequer

In office: 27 July 1945 – 13 November 1947

President of the Board of Trade

In office: 22 February 1942 – 23 May 1945

Born:  26 August 1887, Neath, Wales, UK

Died:  13 February 1962 (aged 74)

Cause of death: suicide

Nationality:    British

Political party: Labour

Edward Hugh John Neale Dalton, Baron Dalton PC (16 August 1887 – 13 February 1962) was a British Labour politician, who served as Chancellor of the Exchequer from 1945 to 1947, when he was implicated in a political scandal involving budget leaks.

Born in Neath, in Wales, his father, John Neale Dalton was chaplain to Queen Victoria and tutor to the future King.

Dalton was educated at the independent Summer Fields School in Summertown, a suburb of Oxford, and then at the independent Eton College, in the small town of Eton in Berkshire, where he was head of his house, but was disappointed not to be elected to "Pop". After leaving school he went up to King's College, Cambridge, where his socialist views, then very rare amongst undergraduates, earned him the nickname "Comrade Hugh". Whilst there, he made three unsuccessful attempts to be elected Secretary of the Cambridge Union.

He went on to further study at the London School of Economics and the Middle Temple. During the First World War, he was called up into the Army Service Corps, later transferring to the Royal Artillery. He served as a Lieutenant on the French and Italian Fronts, where he was awarded the Italian decoration, the Medaglia di Bronzo al Valor Militare, in recognition of his 'contempt for danger' during the retreat from Caporetto; he later wrote a memoir of the war called With British Guns in Italy. Following demobilization, he returned to the LSE and the University of London as a lecturer, where he was awarded a PhD for a thesis on the principles of public finance in 1920.

Dalton stood unsuccessfully for Parliament four times: at the Cambridge by-election, 1922, in Maidstone at the 1922 general election, in Cardiff East at the 1923 general election, and the Holland with Boston by-election, 1924, before entering Parliament for Peckham at the 1924 general election.

At the 1929 general election, he succeeded his wife as Labour MP for Bishop Auckland in 1929 and became a junior Foreign Office minister in the second Labour Government. As with most other Labour MPs, he lost his seat in 1931, though he was re-elected in 1935. During the World War II coalition, Winston Churchill appointed him Minister of Economic Warfare from 1940 and he established the Special Operations Executive, and was later a member of the executive committee of the Political Warfare Executive. He became President of the Board of Trade in 1942; the future Labour leader Hugh Gaitskell, drafted into the Civil Service during the war, was his Principal Private Secretary.

Although a Labour politician Dalton was a strong supporter of Churchill during the crisis of May, 1940, when Lord Halifax and other Conservative supporters of appeasement in the war cabinet urged a compromise peace.

After the Labour victory in the 1945 general election, Dalton had been expected to become Foreign Secretary, but instead the job was given to Ernest Bevin. Dalton became Chancellor of the Exchequer and nationalised the Bank of England in 1946. Alongside Clement Attlee, Ernest Bevin, Herbert Morrison and Stafford Cripps Dalton was initially seen as one of the "Big Five" of the Labour Government.

During this time Britain, whose overseas investments had been sold to pay for the war (thus losing Britain their income), was suffering severe balance of payments problems to pay for the effort of maintaining a global military presence. The American loan negotiated by John Maynard Keynes in 1946 was soon exhausted, and by 1947 rationing had to be tightened and the convertibility of the pound suspended. In the atmosphere of crisis Herbert Morrison and Stafford Cripps intrigued to replace Clement Attlee with Ernest Bevin as Prime Minister; Bevin refused to play along and Attlee bought off Cripps by giving him Morrison's responsibilities for economic planning. Ironically, of the "Big Five" it was to be Dalton who ultimately fell victim to the events of that year.

Dalton was under great strain. Walking into the House of Commons to give the autumn 1947 Budget speech, he made an off-the-cuff remark to a journalist, telling him of some of the tax changes in the budget, which was printed in the early edition of the evening papers before he had completed his speech, and whilst the stock market was still open. This led to his resignation for leaking a Budget secret; he was succeeded by Stafford Cripps. Though initially implicated in the allegations that led to the Lynskey tribunal in 1948, he was ultimately exonerated.

In 1948 he returned to the Cabinet as Chancellor of the Duchy of Lancaster, then became Minister of Town and Country Planning in 1950, renamed as Minister of Local Government and Planning in 1951. He still had the ear of the Prime Minister, and enjoyed promoting the careers of candidates with potential, but was no longer a major political player as he had been until 1947. He left government after the 1951 General Election.

He was president of the Ramblers' Association from 1948 to 1950 and Master of the Drapers' Company in 1958-59. He was made a life peer as Baron Dalton, of Forest and Friton in the County Palatine of Durham in 1960.

Although Dalton was married and had a daughter who died in infancy in the early 1920s, his biographer Ben Pimlott suggested that he was a repressed homosexual. As a young man, Dalton was close to the poet Rupert Brooke, who died of disease on his way to Gallipoli in 1915, and in later years, he acted as a mentor to various handsome young men - who were almost uniformly heterosexual. One notable beneficiary of Dalton's support was Anthony Crosland, whom Dalton talent-spotted at the Oxford Union in 1946 and whose selection for a winnable seat for the 1950 General Election Dalton later helped to arrange. Another was James Callaghan.

His papers, including his diaries, are held at the London School of Economics Library.

Florence Ruth Dalton (born Ruth Hamiliton Fox, 1890 – 15 March 1966), known as Ruth Dalton and later Lady Dalton, was a British Labour Party politician. A long serving member of the London County Council, she also holds the record for the shortest-serving female Member of Parliament.

A graduate of the London School of Economics, she married in 1924 the Labour Party MP Hugh Dalton; they had one child, a daughter. The following year she was elected a member of the London County Council.

Her husband was MP for Peckham in South London, later a solidly Labour seat, but then highly marginal; his majority in 1924 was only 947 votes. He had been selected as Labour candidate for the safe seat of Bishop Auckland in County Durham, where the sitting MP Ben Spoor was retiring, but Spoor died shortly before Christmas 1928, necessitating a by-election. However, Hugh Dalton could not stand without resigning his Peckham seat, and the candidate selected to succeed him in Peckham was John Beckett, then MP for Gateshead, so Hugh Dalton could not stand without triggering another two by-elections.

The Bishop Auckland Constituency Labour Party therefore needed a candidate who would agree to stand down at the next general election. The seventy-strong general committee unanimously chose Ruth Dalton, because she could be relied on to resign in favour of her husband as soon as Parliament was dissolved; no other candidate was even considered.

Ruth won the by-election on 7 February with a large majority and 57% of the votes, and served until Parliament was dissolved on 10 May for the 1929 general election. She had been Member of Parliament (MP) for only 92 days, a record never beaten, but equalled 45 years later by Margo MacDonald, the Scottish National Party MP for Glasgow Govan from 8 November 1973 to 8 February 1974.

Dalton did not enjoy the House of Commons, and did not stand for Parliament again. She felt that more work was accomplished on London County Council, where she held her seat until 1931, returning from 1935 to 1942 as an alderman, including a time as Chairman of the Parks Committee. She later served on the Board of Governors of the Royal Ballet and from 1957-62 on the Arts Council.

Her husband was made a life peer in 1960, and she was then known as Lady Dalton.

Stories, articles & notes about Hugh Dalton:

Mr. Hugh Dalton

Constituencies:

Camberwell Peckham - October 29, 1924 - October 27, 1931

Bishop Auckland - November 14, 1935 - October 8, 1959

Offices:

Under-Secretary: 1929 - 1931

Minister: 1940 - 1942

President of the Board of Trade: 1942 - 1945

Chancellor of the Exchequer: 1945 - 1947

Chancellor of the Duchy of Lancaster: 1948 - 1950

Minister: 1951 - 1951

Baron Dalton: January 28, 1960 - February 13, 1962

STUDIES IN ECONOMICS AND POLITICAL SCIENCE

Edited by

The Director Of The London School Of Economics And

Political Science

I No. 59 in the series of Monographs by writers connected with

the London School of Economics and Political Science

THE INEQUALITY OF INCOMES

Some Aspects of

The Inequality of Incomes

in Modern Communities

BY

Hugh Dalton, M.A.

Cassel Reader in Commerce in the

University of London

London:

GEORGE ROUTLEDGE & SONS, LTD.

NEW YORK: E. P. DUTTON & CO.

1920

While studying economics at Cambridge in 1909-10, i became specially interested in those books, or parts of books, which set out to discuss the distribution of income. I gradually noticed, however, that most " theories of distribution " were almost wholly concerned with distribution as between " factors of production." Distribution as between persons, a problem of more direct and obvious interest, was either left out of the textbooks altogether, or treated so briefly, as to suggest that it raised no question, which could not be answered either by generalizations about the factors of production, or by plodding statistical investigations, which professors of economic theory were content to leave to lesser men.

This state of things appeared to me to be very unsatisfactory, and my opinion was strengthened, when I read certain criticisms by Professor Cannan upon existing theories of distribution and still more when, at a later stage, I came into personal contact with his teaching in London.

In 1911 I was elected to the Hutchinson Research Studentship at the London School of Economics, and began a study of the causes of the inequality of incomes in modern communities, with special reference to the effects of inherited wealth. But this scheme gradually broadened in several directions. In the first place I was led to examine more closely the historical development of the theory of distribution. In the second place, as a preliminary to, and as a partial basis of, my main enquiry, I attempted to extend the existing theory regarding the division of the total income of a community between different categories and, in particular, between different factors of production. In the third place, I attempted to compare statistically the inequality of incomes in different communities. Here I was struck, on the one hand, by the inadequacy of the available statistics, and on the other by the ambiguity of the conception of " inequality," and the need to give it, with special reference to incomes, a more precise definition and a logical measure. For many of the measures proposed by writers on the subject seemed empirical, ill-supported by argument, and sometimes even contradictory in their results. In the fourth place, I tried to reach definite conclusions regarding various proposals designed to reduce inequality without injury to productive power.

By the summer of 1914 I had completed the first two Parts of the book as it now stands, and collected a considerable amount of material for the remaining Parts. After the outbreak of war my work was interrupted by more than four years of military service, and I was not free to take it up again till May, 1919. With a view to early publication, I then recast my scheme, putting aside a large quantity of the material which I had hoped to use. In particular, I have dropped out all discussion of the measurement of inequality, on which subject I hope shortly to publish a self-contained study.

In Part I., then, I enquire how the great inequality of incomes in modern communities strikes modern minds, especially at the immediate close of the war, and how far ethical first principles give any guidance in regard to it.

In Part II., I sketch the growth of the theory of distribution in the hands of successive generations of economists. It is an inevitable result of the revision of my pre-war plans that this part of the book should seem disproportionately long.

The theory developed in Part III'., on the subject of the division of income between categories, is very much a skeleton. But even a skeleton is easier to clothe than a ghost, and it is only the ghost of a theory on this subject that can be discovered in existing textbooks. I shall watch hopefully for later writers, who will clothe my skeleton with flesh, or even, perhaps, re-arrange its bones.

In Part IV., in discussing the division of income between persons and the causes of the inequality of incomes, I have deliberately laid great stress on the factor of inherited wealth, owing to its neglect by most other writers. In Chapter X. of Part IV. I have brought together a number of tentative suggestions for the practical reform of the law of inheritance. But I have not attempted to discuss the probable effects, on inequality and on productive power, of the various projects now current for the reorganization of industry, in whole or in part, on a Socialistic basis. For both thought and action in this matter are moving rapidly in many parts of the world, and any adequate discussion would need to be lengthy, while present conclusions, especially as regards production, may soon be modified by new experience.

My obligations to Professor Cannan, as regards the general conception of the book, have already been indicated. I have further to thank him for many criticisms on points of detail. Sir Arthur Peterson and Mr. T. E. Gregory have also given me the benefit of their judgment on particular points.

HUGH DALTON.

London School of Economics, March, 1920.

(1) Hugh Dalton, letter to Lord Halifax (2nd July, 1940)

We have got to organize movements in enemy-occupied territory comparable to the Sinn Fein movement in Ireland, to the Chinese Guerillas now operating against Japan, to the Spanish Irregulars who played a notable part in Wellington's campaign or - one might as well admit it - to the organizations which the Nazis themselves have developed so remarkably in almost every country in the world. This "democratic international" must use many different methods, including industrial and military sabotage, labour agitation and strikes, continuous propaganda, terrorist acts against traitors and German leaders, boycotts and riots.

It is quite clear to me that an organization on this scale and of this character is not something which can be handled by the ordinary departmental machinery of either the British Civil Service or the British military machine. What is needed is a new organization to co-ordinate, inspire, control and assist the nationals of the oppressed countries who must themselves be the direct participants. We need absolute secrecy, a certain fanatical enthusiasm, willingness to work with people of different nationalities, complete political reliability. Some of these qualities are certainly to be found in some military officers and, if such men are available, they should undoubtedly be used. But the organization should, in my view, be entirely independent of the War Office machine.

(2) Hugh Dalton, diary entry (18th December, 1940)

Stanley Baldwin desired only not to be troubled with foreign affairs at all. He left his successive Foreign Secretaries completely free. (There was, I recall, though I do not mention it tonight, the famous case of Hoare proceeding to Paris to negotiate the Hoare-Laval Pact, and Baldwin, asked in Cabinet by some of the younger Tories whether all was well, and whether there should not be some discussion now before irrevocable decisions were taken, said, 'I think we all have

confidence in Sam; we can safely leave it in his hands.'

Halifax relates that Baldwin, in the year of the Abdication, took three months' holiday (repeat three months), at the end of which he asked Eden, then Foreign Secretary, "Have you had many telegrams about the King?" Eden said no. Then Baldwin said, "I have had a great many, some from the most extraordinary people. I foresee that I shall have a lot of trouble over this. I hope that you will not bother me with foreign affairs during the next three months." Yet these were mois mouvementes in foreign affairs. Hitler was arming, arming, arming, day by day. But Baldwin was focused on the tactics of the Abdication.

(3) Hugh Dalton, diary entry (28th April, 1941)

Oliver Stanley (Conservative M.P. for Westmorland) dined with me alone in a secluded corner of the Lansdowne Club. He asked me what I had thought of the Prime Minister's speech on the air on Sunday. I said that I thought he had done well in a very difficult situation and had heartened his hearers. Stanley said, "It may have gone down very well with the 99 per cent who know nothing, but the 1 per cent of us who do know, feel rather differently."

He then began a long tirade against the Prime Minister and the Foreign Secretary, with whom I had said that I found my personal relations developing very satisfactorily, and that this was additionally important for smooth working, since he was so close to the Prime Minister. Stanley said he did not think he was the sort of man who ought to be close to the Prime Minister. He was, he added, vain, weak and unreliable. He had let down Stanley, Malcolm MacDonald and the rest at the time of his resignation. He had promised to consult them, and they had acted together as a group. They were on many points opposed to Chamberlain's Foreign Policy. Eden, however, chose a most frivolous pretext on which to resign, and gave Stanley and others no warning that he was going to do so. So much so that, at the Cabinet, on the proposal that we should begin again negotiations with Italy, Chamberlain had gone round the table, and got the acquiescence of all of them, and it was only then that Eden had quite suddenly said that he could not go on.

Stanley then proceeded to attack, with such mild vehemence as he could command, the terrible error, as he judged it, of sending anything beyond a small token force to Greece. This, he said, was a crowning blunder. It was the Prime Minister's fault. The decision had been taken against all military and naval advice. It should have been seen from the start that the adventure was quite hopeless. The only real way to help Greece was to win the war. Instead of that we might now lose; both Greece and Egypt. We had thrown away a most valuable Air Force in Greece. At least four squadrons of fighters and three squadrons of bombers had been destroyed. It was quite wrong for Eden to have gone to the Middle East and worst of all to go to Athens. There he had been cheered in the streets and smothered in roses. How in such surroundings could he keep his judgment clear. A Foreign Secretary should stay always in the Foreign Office protected by distance and his officials from such local impressions.

(4) Hugh Dalton, diary entry (27th August, 1942)

In the Middle East the morale of all our people was most deplorable. Auchinleck had completely lost confidence in himself. Everybody was always looking over their shoulders towards prepared positions to which to retreat. The units at the Front were hopelessly mixed up, and there was no evidence of good staff work. Auchinleck had 180 Generals on his staff. This number has now been reduced to 30 by his successor. We should, of course, have hit Rommel hard when he reached his furthest point of advance. Winston Churchill and Sir Alan Brooke both went up to the line and followed different routes, and met that evening to compare notes. "Both", said Morton, "came back with faces like boots." They were both convinced that drastic and speedy action must be taken. Already there had been a very great improvement. But it was only just in time. Alexander, Auchinleck's successor, has hitherto been in charge of brilliant retreats. He was the last man off the beaches at Dunkirk and since then he has done Burma.

(5) Hugh Dalton, diary entry (7th September, 1942)

All ministers of Cabinet rank are invited to lunch at the Admiralty, and the P.M. makes one of his very attractive, intimate and amusing speeches to his 'pals and comrades'. He recalls our first gathering just before Dunkirk, and how then all seemed very black and we were all prepared to give up everything, including life itself as one of the least things to give up, rather than give in, and how we, by our united determination to go on to the end, sustained him in those days. And now, in spite of all, the prospect is immeasurably brighter. He gave an account, much on the lines that I had heard before, of his visit to the Middle East and Moscow. He said very frankly that Auchinleck had become a very dangerous failure and that the spirit of the troops was not at all good, though he hoped that now it had been improved.

Of Stalin he said many complimentary things. Also "He is very genial out of business hours" and this he had appreciated. He thought that they had got on very well together. The last night, he being due to catch a plane away at 5 next morning, Stalin asked him, when they had finished their formal business about 7 p.m., whether he had any preoccupation that evening. When he said no, Stalin said, "Then let us go and have some drinks together." They then repaired to the Kremlin, to Stalin's private apartments, which were conveniently, but by no means luxuriously, furnished. Stalin then proceeded himself to draw the corks from a large number of bottles, in the midst of which process a pretty red-haired girl entered. She kissed Stalin, who looked to see how Churchill reacted to this. "And I confess", said the P.M., "that I acquired a quite definite physical impression. It was Stalin's daughter."Stalin then asked, "Do you mind if we have Molotov as well?", and added, "There is one thing you can say in defense of Molotov: he can drink." So Molotov was allowed in too. Then they had drinks and food and drinks and talk till 3 a.m., and then the P.M. said that he must go to pack up, as his plane left at 5. The P.M. is quite convinced that the Russians will fight on and on until victory. "Even if we and the Americans were to throw in our hands tomorrow, I am sure that they would go on."

(6) Hugh Dalton, diary entry (22nd October, 1942)

On Sunday night Cabinet changes are announced on the air. Morrison succeeds Cripps in the War Cabinet and the latter drops down to Minister of Aircraft Production, thus becoming a lodger downstairs in my own building. This hole is made by the appointment of Llewellin to Washington. Cranborne is to be Lord Privy Seal, and Oliver Stanley returns to the Government as Colonial Secretary. Eden is to lead the House of Commons.

I write at once to Morrison, "Congratulations! The War Cabinet is strengthened." Next morning the Daily Herald begins its leader with these same last five words. It is, indeed, a great improvement. Nearly all Cripps's 'mystique' is now gone, and he has missed all his chances - never really good - of resigning with credit. He has, I think, been very skillfully played by the P.M. He may, of course, be quite good at the Ministry of Aircraft Production, but seldom has anyone's political stock, having been so outrageously and unjustifiably overvalued, fallen so fast and so far. I add in my letter to Morrison that I would like soon to have a meeting and a talk, and I write also to Ellen Wilkinson summarizing my letter to Morrison.

(7) Hugh Dalton, diary entry (7th September, 1942)

P.M. talks to No. 1 ministers. He has not held one of these general talks for some time. He says that the great battle in North Africa will begin this week. We have a superiority in men of more than two to one, in guns and aircraft of a good deal more. He thinks it will be a Stalingrad. Hitler has been constantly pouring in reinforcements and supplies by sea and air. We have sunk and destroyed much, but much has kept on coming in. This is Hitler's usual obstinacy. But we need not regret it. Hitler is, moreover, playing for time, and we have reason to know that he hopes we shall not start any new large land operations till 1st July. This probably means that he will by then have trained and ready the last 2,000,000 men whom he has scraped and squeezed out of German reserves of manpower. He is still immensely powerful; particularly if the Russians slow down, he could easily detach some thirty Divisions from the Eastern Front for other duties. He may still either push down through Spain or attack Turkey. If we must choose, we should prefer the former. Much thought has been given to our next move after clearing North Africa. There are practically no German troops in Italy or in the islands. The P.M. has been carrying on a double flirtation with Roosevelt and Stalin. The former has gone pretty easily. His relations with the President are most intimate and friendly. He does not want to use the direct approach on routine questions, but on questions of outstanding importance he is always pretty confident that it will work. Stalin is more difficult. But he has received two telegrams from him lately. One is thanking Churchill for the film Desert Victory. This has clearly been much appreciated. It is being shown in many parts of Russia. It demonstrates, says Stalin, how bravely and how skillfully the British are fighting. It disposes of the stories put about by those miscreants who allege that the British are not seriously in the war. The second telegram is in reply to a discouraging message about convoys. He takes the news very well, though not, of course, with pleasure. Further, Stalin always telegraphs congratulations whenever we raid Berlin. He evidently takes very great satisfaction in this. And no wonder!

(8) Konni Zilliacus wrote about the relative merits of Ernest Bevin and Hugh Dalton in his unpublished autobiography, Challenge to Fear.

He (Bevin) was a great working class leader with a fine record. But he was tragically miscast as Labour's Foreign Secretary in 1945. For he did not have a due to the problems facing him. He was too old and set in his ways to learn. Or rather, to unlearn and then learn afresh: that is, to do the kind of painful thinking that goes down to one's own prejudices and assumptions, tests them in the light of reason and facts, and then works out a policy that is genuinely 'realistic' because it is rooted in reality and not to an out-of-date conception of the world in which we are living, and harnessed to Labour's view of the national interest and not to that of the defenders of the old order.

Hugh Dalton would have been far better, first of all because he really did know a lot about foreign affairs; secondly because he knew how to manage the Foreign Office officials, instead of being run by them; thirdly, because he was capable of learning from experience and correcting his mistakes; fourthly because he would listen to the views of back bench colleagues instead of treating any criticism or comments as an insult and relying on blind trade union loyalties and the power of the block vote to impose on the Labour Party the Churchillian policies that the Foreign Office had induced him to adopt.

(9) Harold Wilson, Memoirs: 1916-1964 (1986)

We were therefore closely involved in the economic crisis in the late autumn of 1947, which had persuaded Hugh Dalton in November to introduce an interim budget. It brought about his downfall. On his way to the House, he met by chance the Lobby correspondent of an evening newspaper and nonchalantly told him the main features of the measures he had in mind. These were telephoned by the journalist to his newspaper and, as a result of some misunderstanding, were printed and on the streets before the Chancellor, who as usual began with a general statement analysing the country's economic and financial problems, started to outline his specific proposals. While he was speaking, early copies of the newspaper were being passed from hand to hand on the Conservative benches. At first there was no attempt by the

Opposition to make capital out of the Dalton gaffe, and Churchill spoke in a sympathetic vein about the indiscretion. But this was not enough for some of his backbenchers. The following afternoon, it became clear that Churchill was going to press the matter hard, involving Dalton's continuance in office.

(10) Herbert Morrison, An Autobiography (1960)

The 1947 economic crisis was at root largely due to the faulty administration at the Treasury for which Dalton must be held responsible as head of the department. Cripps, who was by this time a close friend of Dalton's, felt that the economic co-ordination required the attention of a full-time economic minister. Cripps, with the support of Dalton, was ready to lay the blame at Attlee's feet. I was told that Cripps wanted Bevin to be prime minister, and that Dalton agreed to this. Bevin, it was said - apparently wrongly - was ready to accept. I was asked what would I do? I have never felt up to indulging in high conspiracy and I refused to participate. Anyway, the conspiracy failed.

(11) George Brown, In My Way (1970)

Dalton had known John Carvel for years and he stopped to chat with him for a moment, very misguidedly mentioning one or two of the things that he proposed to do in his Budget. It never occurred to Dalton that there could be any harm in this; he was on his way into the Chamber to make his Budget speech, and it never crossed his mind that any newspaper could print it before he said it.

But it did. A few lines of Budget news got into the Stop Press column of the old London Star, not, indeed, before Dalton got up, but before he sat down. That was enough to make Dalton feel that he had to resign as Chancellor. He was by then so broken by his struggles in the Cabinet that I think he would have resigned soon, anyway, but he would not have gone because of what was inevitably described as a Budget scandal. Dalton was undoubtedly indiscreet, but whether the incident was sufficiently scandalous to require the resignation of a Senior Minister I am less sure. Dalton himself felt that it was, and that was that.

Dalton wrote two books about his political career, Call Back Yesterday (1953) and High Tide and After (1962).

Britain's aging Queen Victoria, pottering about the halls of Windsor Castle in 1892, came upon a five-year-old boy eating grapes. She gave him a kindly pat on the head, for he was the son of her personal chaplain, Canon J. N. Dalton. "Go away, Queen," shouted the brash little boy, "I'm eating grapes." Unamused, the Queen exclaimed: "What a loud voice that boy has!"

The little boy waxed—eventually to 6 ft. 3 in. The voice waxed too, and earned for Hugh Dalton the nickname "Booming Bittern."

Many a Tory never forgave this product of aristocratic Eton and King's College, Cambridge, for joining the Labor Party after World War I. He was called a traitor to his class. Among Laborites, sarcastic Tory-lasher Dalton won honors, if not complete confidence. During World War II he served first as Minister of Economic Warfare, later as President of the Board of Trade. After the war, Clement Attlee made him Chancellor of the Exchequer, traditionally No. 2 post in the British Cabinet. Recently, as Sir Stafford Cripps towered into prominence as Britain's economic dictator, Dalton's own political stature shrank.

Offense. One day last week Hugh Dalton strode confidently across the tessellated inner lobby of the House of Commons; he knew that he held Britain's spotlight. In his battered red leather dispatch box were the secrets of Britain's interim budget. Burly, greying John Lees Carvel, political correspondent for London's evening Star, cheerily hailed his old friend Dalton as he approached the door of the House, asked jokingly about the budget. Dalton threw a jovial arm around Carvel's shoulders and, remembering that the journalist liked a nip now & then, said: "John, your whiskey is going to cost you a bit more from now on. You'll have to pay a penny more for your beer, too." Item by item the salient points of the budget came out in Dalton's banter.

Dalton strolled into the House. Carvel went to a telephone and dictated 55 fateful words to his paper. By the time Dalton had been booming for 13 minutes (but before he had mentioned any specific tax changes), the Star's "stop-press" column told of Britain's new taxes.

Admission. Next morning the tempest he had so casually stirred up broke on Dalton. Tory M.P. Victor Raikes told Dalton that he would ask a question in the House about the tip to the Star. After a routine Cabinet meeting, Dalton took Attlee aside and admitted his indiscretion. He offered his resignation. That afternoon a much subdued Dalton arose in the House of Commons to answer Raikes's question. "I appreciate that this was a grave indiscretion on my part," he intoned, "for which I offer my deep apologies to the House."

Winston Churchill arose and generously offered implied absolution: "May I acknowledge, on the part of the Opposition, the very frank manner in which the Right Honorable Gentleman has expressed himself to the House, and our sympathy with him at the misuse of his confidence which has occurred."

But the storm gathered momentum. While the House buzzed with rumors, Attlee called a special Cabinet session, and Tory backbenchers called on Churchill to demand Dalton's head. In the evening, while Churchill was preparing a letter to Dalton demanding an inquiry, Attlee acted.

History Review, March 2007 by John Plowright

Summary:

The article provides a biographical sketch of Hugh Dalton, Chancellor the Exchequer in Great Britain from July 1945 to November 1947. According to Ben Pimlott, he was the first truly socialist chancellor imposing redistributive taxation. An educational background of Dalton is presented. His affiliation with British Prime Minister Winston Churchill is discussed. Moreover, the role of Dalton in the history of the Labour Party in Great Britain is also addressed.

Excerpt from Article:

Hugh Dalton was one of the dominant figures in the history of the Labour party and Chancellor the Exchequer, from July 1945 to November 1947, at a vital time. According to Ben Pimlott, he was the first truly socialist Chancellor, imposing redistributive taxation 'with a song in his heart'. In fact he revelled in the role of class traitor.

Few socialists have had as exclusive an experience of privilege as the young Hugh Dalton. His father was tutor and then 'governor' to the two sons of the future Edward VII -- the Duke of Clarence and the future George V -- before he was made a canon (and steward) of St George's Windsor. From this rarefied background the young Hugh proceeded to Eton and King's College Cambridge (with a closed Eton exhibition in mathematics).

At Cambridge he was emotionally attached to Rupert Brooke (with whom he joined the Fabian Society) and intellectually engaged by economics (to which he changed after a third in Part I of the Mathematical Tripos) through the teaching of Alfred Marshall and A. C. Pigou.

After a false start in the law he began a long association with the London School of Economics, although he was beaten to a lectureship there in 1913 by Clement Attlee. He secured a commission in the army in 1915 and served with the Army Service Corps in France and the artillery in Italy. Returning to the LSE after the war (where he held the Cassell Readership in Commerce from 1920 until 1935) he entered parliament on his fifth attempt, in November 1924, as Labour MP for Peckham in London. In the 1929-31 Labour government he served as Under-Secretary of State for Foreign Affairs under Arthur Henderson.

In the debacle of 1931 Dalton lost his seat and thus lost precedence to Attlee and Stafford Cripps who, together with George Lansbury, managed to retain theirs. He returned to parliament in the 1935 general election and thereafter spent much energy vainly trying to replace Attlee with Herbert Morrison (just as he was to engage in similarly futile unsolicited manoeuvres on behalf of Ernest Bevin in 1947).

Dalton damaged his future prospects by loudly expressing his view that the 1935 contest for the leadership of the Labour party was between a nonentity (Attlee) and a drunk (Arthur Greenwood). Dalton was not unique in underestimating Attlee, but whereas others came to a grudging respect of the man who led Labour for two decades, Dalton never fully overcame his contempt for the man he once labeled a 'little mouse'.

Opinions differ regarding Dalton's work in opposition in the thirties. Roy Jenkins, for example, sees this as his finest hour, outshining Attlee, Cripps and Lansbury in the vital job of resisting a lurch to the left, playing a central role in formulating the party's economic policy and generally rebuilding the party's prospects. Noel Annan, in contrast, rightly credits Bevin with having done more to steer Labour out of the paths of pacifism, whilst pointing out that although its policy may have been more electorally appealing than hitherto it was equally nonsensical, consisting as it did of a determination to deter aggressors through adherence to the principle of collective security rather than through serious rearmament. Thus in 1937 Dalton got Labour to commit itself in principle to rearmament (insofar as its official line moved from opposition to abstention on the service estimates), but it still voted against the introduction of a limited measure of peacetime conscription in April 1939.

As one of Labour's leading opponents of appeasement Dalton reaped his reward when Churchill became Prime Minister and offered him the post of Minister of Economic Warfare, outside the five-man War Cabinet. Dalton's natural belligerence, which was always at its greatest when directed against the Germans and Whitehall officials, saw him triumph against both sets of enemies and extend the war-making capacities of his department from economic blockade to propaganda and sabotage, when he was put in charge of the Special Operations Executive (SOE) in July 1940. This may seem of tangential importance now but it was not considered in that light at the time, when bombing, blockade and fomenting resistance appeared to be the three-pronged strategy for harassing and weakening the enemy, given Britain's inability to engage Hitler's land forces in significant numbers for the foreseeable future.

A TRAITOR TO HIS CLASS

By JONATHAN SCHNEER; JONATHAN SCHNEER, WHO TEACHES HISTORY AT GEORGIA STATE UNIVERSITY, IS THE AUTHOR OF ''BEN TILLETT: PORTRAIT OF A LABOR LEADER.'' HE IS NOW WRITING A BOOK ON THE BRITISH LABOR LEFT FROM 1945 TO 1951.

Published: September 15, 1985

HUGH DALTON By Ben Pimlott. Illustrated. 752 pp. Manchester, N.H.: Jonathan Cape/Merrimack Publishers' Circle. $29.95.

HIS father was tutor to Queen Victoria's grandsons and Canon of Windsor. Hugh Dalton grew up - literally - in the shadow of the royal palace, leaving only for Eton, en route to King's College, Cambridge. Incongruous beginnings for ''the most socialist Chancellor of the Exchequer Britain ever had.'' But he was ''the first of the upper class renegades,'' as Ben Pimlott, who teaches politics at Birkbeck College, University of London, and is the author of ''Labor and the Left in the 1930's'' demonstrates in this sympathetic, judicious biography. For 30 years Dalton was the rogue elephant of British politics, happiest when trampling on Tory sensibilities. His enemies claimed he believed in redistributing wealth less because he sympathized with the poor than because he hated the privileged. His supporters, his biographer among them, view Dalton as a key figure in the evolution of Labor as a moderate, popular, democratic Socialist party.

He emerged as a major figure after 1931, when a Labor government in which he held junior rank failed to cope with the Great Depression and fell from power. Soon he numbered nearly as many enemies within Labor's ranks as without. Aggressive and bombastic, an inveterate though rarely successful intriguer, Dalton was, according to a colleague, ''the shiftiest man I ever knew.'' Yet the party needed him. Quick to apprehend Hitler's menace, he as much as anyone helped wean Labor from its traditional pacifism. Simultaneously, he was developing the program of ''practical Socialism'' with which Labor has been identified ever since. Historians have emphasized developments during World War II in accounting for Labor's 1945 program and landslide electoral victory. Mr. Pimlott shows that the groundwork was laid earlier. Under Dalton, study groups and party subcommittees hammered out details of an economic policy. When Labor took office in 1945, it was prepared as never before for power.

So was Dalton. During World War II he had been Minister of Economic Warfare and president of the Board of Trade under Churchill. Now he rode into the treasury on the crest of the wave that had borne Labor to office. Aiming primarily to reduce inequality, Dalton lowered taxes for the poor and raised them for the rich ''with a song in my heart.'' His objective was ''to find money to finance a series of 'streamlined Socialist statutes.' '' From 1945 to 1951, Labor did nationalize nearly 20 percent of the economy, build a welfare state of unprecedented generosity and maintain full employment.

Did Dalton make this possible? He could not persuade the Government to finance such measures by cutting military expenditure. Instead it accepted an American loan, negotiated by Lord Keynes. Dalton acquiesced. Otherwise ''there would have been shortages, heavy and growing unemployment'' and, eventually, electoral defeat. Ironically, America helped finance Britain's democratic socialist experiment.

There was a price - free convertibility of sterling into dollars. Convertibility, which would allow the United States to penetrate British-dominated trading areas, was scheduled to begin in July 1947. When it did, a run on the pound ensued. Convertibility was suspended after a month. Nevertheless, Britain's gold and dollar reserves were alarmingly depleted. Dalton had foreseen this. Still, his reputation went into irreversible decline. Prime Minister Clement Attlee accepted his resignation soon afterward, ostensibly for reasons unrelated to the convertibility crisis. Though Attlee later appointed him to other Cabinet posts, Dalton's day on center stage was over.

It had been a remarkable stint. Dalton played a crucial role in the Labor Party during a critical period in its history. He and Labor came of age simultaneously. Their joint progress is chronicled with lucidity and thoroughness in this impressive volume. Ben Pimlott shows that the peak of Labor's fortunes came after World War II, when, with Dalton at the fore, Labor built the welfare state. His booming voice continues to reverberate in Westminster.

Books by Hugh Dalton:

With British Guns in Italy, A Tribute to Italian Achievement.

The Second World War diary of Hugh Dalton 1940-45.

Hitler's war before and after.

Some Aspects of the Inequality of Incomes in Modern Communities.

Principles of Public Finance.

Towards the peace of nations;: A study in international politics.

The fateful years;: Memoirs 1931-1945 (His Memoirs)

High tide and after: Memoirs 1945-1960.

Photos of Lord Dalton

Not waving but drowning: Hugh Dalton, the last Labour chancellor to resign in disgrace

Hugh Dalton planning his campaign at Labor Conference.

New British Chancellor of Exchequer Hugh Dalton, posing for his portrait in front of a painting of the first Earl of Godolphin.

Camille Gutt (L) and Eugene Meyer (R) looking on as newly elected chairman of World Bank Hugh Dalton (2L) accepts gavel from John W. Snyder (2R).

(L to R) Ellen Wilkinson, Herbert Morrison, Mrs. Barbara Gould and Hugh Dalton strolling along.

(L to R) Sec. of State for war Emmanuel Shinwell, Hugh Dalton, John Foster, Clement Attlee, G.M. Hering, and Hugh Gaitskell.

A portrait of the President of the Board of Trade-Socialist Hugh Dalton, laughing.

Hugh Dalton (L) chatting with Younger at the Labor Party Conference.