The Chancellors (3): Reginald McKenna

41405472_1483642198Reginald McKenna, 1915-16

Liberal (in Asquith’s wartime coalition)

For McKenna’s background, see the article in the section on home secretaries here.

When the coalition was formed, it was widely expected that McKenna (having been home secretary, unhappily, since 1911) would be sacked: instead, he went to the Treasury. There, he played a significant role in organising war finances: he raised taxes (including an excess profits tax), passed the McKenna duties on luxury imports (bitterly opposed by some Liberals) and negotiated loans from Wall Street to prop up sterling. He was strongly opposed to conscription, believing it would damage the war economy and that the naval blockade would win the war, but did not resign over the issue.

He had fallen out badly with Lloyd George in 1911, when at the Admiralty. He was forced to swap jobs with Churchill and go to the Home Office. A partial rapprochement before the war did not heal the breach. In the crisis of 1916, he was one of the ministers urging Asquith to resist Lloyd George’s call for a war cabinet, and went to the backbenches along with Asquith and most of the other Liberal ministers. He didn’t want to serve under Lloyd George; Lloyd George didn’t want him.

Like most of the ‘Squiffites, he lost his seat in the Coupon Election, and went on to be chairman of the Midland Bank. In 1922, Bonar Law offered McKenna a cabinet post and in 1923, Baldwin wanted him as chancellor again, but McKenna’s condition for so doing (a London seat) was a step too far for Baldwin. That two Conservative prime ministers asked him to serve reflects the shifting political loyalties of the early ‘twenties; that he considered it might reflect the antipathy to Lloyd George that he shared with Baldwin in particular. He remained in public life: he advised Churchill to go back on to Gold in 1925 (as the least worst option), as well as advising both Labour governments (working on the Dawes Plan in 1924, and on the Macmillan Committee, 1929-31). He is one of ten men to have been at both the Treasury and Home Office since 1900, yet is now a largely forgotten figure.

You can read about McKenna’s time at the Home Office here.

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