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In contemporary newspaper articles he referred to the Spanish Republican government as a communist front, and Franco's army as the "Anti-red movement

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Speaking in the House of Commons in 1937, Churchill said, "I will not pretend that, if I had to choose between communism and Nazism, I would choose communism."[155] In a 1935 essay titled "Hitler and his Choice", which was republished in his 1937 book Great Contemporaries, Churchill expressed a hope that Hitler, if he so chose, and despite his rise to power through dictatorial action, hatred and cruelty, might yet "go down in history as the man who restored honour and peace of mind to the great Germanic nation and brought it back serene, helpful and strong to the forefront of the European family circle." Churchill's first major speech on defence on 7 February 1934 stressed the need to rebuild the Royal Air Force and to create a Ministry of Defence; his second, on 13 July urged a renewed role for the League of Nations. These three topics remained his themes until early 1936. In 1935, he was one of the founding members of The Focus, which brought together people of differing political backgrounds and occupations who were united in seeking "the defence of freedom and peace." The Focus led to the formation of the much wider Arms and the Covenant Movement in 1936.

Churchill, holidaying in Spain when the Germans reoccupied the Rhineland in February 1936, returned to a divided Britain. The Labour opposition was adamant in opposing sanctions and the National Government was divided between advocates of economic sanctions and those who said that even these would lead to a humiliating backdown by Britain as France would not support any intervention.[158] Churchill's speech on 9 March was measured, and praised by Neville Chamberlain as constructive. But within weeks Churchill was passed over for the post of Minister for Co-ordination of Defence in favour of Attorney General Sir Thomas Inskip.[159] A. J. P. Taylor called this "an appointment rightly described as the most extraordinary since Caligula made his horse a consul."[160] In June 1936, Churchill organised a deputation of senior Conservatives who shared his concern to see Baldwin, Chamberlain and Halifax. He had tried to have delegates from the other two parties and later wrote, "If the leaders of the Labour and Liberal oppositions had come with us there might have been a political situation so intense as to enforce remedial action."[161] As it was, the meeting achieved little, Baldwin arguing that the Government was doing all it could, given the anti-war feeling of the electorate.

On 12 November, Churchill returned to the topic. Speaking in the Address in Reply debate, after giving some specific instances of Germany's war preparedness, he said "The Government simply cannot make up their mind or they cannot get the prime minister to make up his mind. So they go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all powerful for impotency. And so we go on preparing more months more years precious perhaps vital for the greatness of Britain for the locusts to eat."

R. R. James called this one of Churchill's most brilliant speeches during this period, Baldwin's reply sounding weak and disturbing the House. The exchange gave new encouragement to the Arms and the Covenant Movement.

In June 1936, Walter Monckton told Churchill that the rumours that King Edward VIII intended to marry Mrs Wallis Simpson were true. Churchill then advised against the marriage and said he regarded Mrs Simpson's existing marriage as a 'safeguard'. In November, he declined Lord Salisbury's invitation to be part of a delegation of senior Conservative backbenchers who met with Baldwin to discuss the matter. On 25 November he, Attlee and Labour leader Archibald Sinclair met with Baldwin, were told officially of the King's intention, and asked whether they would form an administration if Baldwin and the National Government resigned should the King not take the Ministry's advice. Both Attlee and Sinclair said they would not take office if invited to do so. Churchill's reply was that his attitude was a little different but he would support the government.

The Abdication crisis became public, coming to a head in the first two weeks of December 1936. At this time, Churchill publicly gave his support to the King. The first public meeting of the Arms and the Covenant Movement was on 3 December. Churchill was a major speaker and later wrote that in replying to the Vote of Thanks, he made a declaration 'on the spur of the moment' asking for delay before any decision was made by either the King or his Cabinet.[166] Later that night Churchill saw the draft of the King's proposed wireless broadcast and spoke with Beaverbrook and the King's solicitor about it. On 4 December, he met with the King and again urged delay in any decision about abdication. On 5 December, he issued a lengthy statement implying that the Ministry was applying unconstitutional pressure on the King to force him to make a hasty decision. On 7 December, he tried to address the Commons to plead for delay. He was shouted down. Seemingly staggered by the unanimous hostility of all Members, he left.

Churchill's reputation in Parliament and England as a whole was badly damaged. Some such as Alistair Cooke saw him as trying to build a King's Party.[169] Others like Harold Macmillan were dismayed by the damage Churchill's support for the King had done to the Arms and the Covenant Movement. Churchill himself later wrote "I was myself so smitten in public opinion that it was the almost universal view that my political life was at last ended." Historians are divided about Churchill's motives in his support for Edward VIII. Some such as A. J. P. Taylor see it as being an attempt to 'overthrow the government of feeble men'. Others such as R. R. James see Churchill's motives as entirely honourable and disinterested, that he felt deeply for the King.

Churchill later sought to portray himself as an isolated voice warning of the need to rearm against Germany. While it is true that he had a small following in the House of Commons during much of the 1930s, he was given privileged information by some elements within the Government, particularly by disaffected civil servants in the War Ministry. The "Churchill group" in the latter half of the decade consisted of only himself, Duncan Sandys and Brendan Bracken. It was isolated from the other main factions within the Conservative Party pressing for faster rearmament and a stronger foreign policy; one meeting of anti-Chamberlain forces decided that Churchill would make a good Minister of Supply.

 

Even during the time Churchill was campaigning against Indian independence, he received official and otherwise secret information. From 1932, Churchill's neighbour, Major Desmond Morton, with Ramsay MacDonald's approval, gave Churchill information on German air power. From 1930 onwards Morton headed a department of the Committee of Imperial Defence charged with researching the defence preparedness of other nations. Lord Swinton as Secretary of State for Air, and with Baldwin's approval, in 1934 gave Churchill access to official and otherwise secret information.

Swinton did so, knowing Churchill would remain a critic of the government, but believing that an informed critic was better than one relying on rumour and hearsay.[178] Churchill was a fierce critic of Neville Chamberlain's appeasement of Adolf Hitler and in private letters to Lloyd George (13 August) and Lord Moyne (11 September) just before the Munich Agreement, he wrote that the government were faced with a choice between "war and shame" and that having chosen shame would later get war on less favourable terms.

Even during the time Churchill was campaigning against Indian independence, he received official and otherwise secret information. From 1932, Churchill's neighbour, Major Desmond Morton, with Ramsay MacDonald's approval, gave Churchill information on German air power. From 1930 onwards Morton headed a department of the Committee of Imperial Defence charged with researching the defence preparedness of other nations. Lord Swinton as Secretary of State for Air, and with Baldwin's approval, in 1934 gave Churchill access to official and otherwise secret information.

Swinton did so, knowing Churchill would remain a critic of the government, but believing that an informed critic was better than one relying on rumour and hearsay. Churchill was a fierce critic of Neville Chamberlain's appeasement of Adolf Hitler and in private letters to Lloyd George.

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