McKENNA, REGINALD (1863-), British politician and financier, was born in London July 6 1863, and educated at King's College. He went up to Trinity Hall, Cambridge, as a scholar and graduated as a senior optime in 1885, being elected an hon. fellow of his college in 1916. He also gained distinction as an oar, rowing bow in the university eight in 1887. He was called to the bar in 1887, and practised till, after an unsuccessful attempt at Clapham in 1892, he was elected Liberal member for North Monmouthshire in 1895. He found his party in opposition, but during the following ten years he established a reputation as a vigilant and acute critic of ministerial proceedings, especially in matters of education and finance. When his party returned to power in Dec. 1905 he became Financial Secretary to the Treasury, and in 1907 was promoted to the presidency of the Board of Education, but he was no better able than his predecessor, Mr. Birrell, to draft a bill which would satisfy the Nonconformists and yet pass the House of Lords. His tenure of the office was brief, as, on Mr. Asquith's succeeding to the premiership in the spring of 1908, he was transferred to the Admiralty.
He entered on his new duties at a time when the country was profoundly stirred by the rapid increase of the German fleet, and was in doubt whether the preparations of the Admiralty were on a sufficiently extensive scale. At the same time a large portion of the Liberal party was disposed to belittle the danger and to call a halt to building-schemes in the interest of peace and economy. Mr. McKenna, relying upon the advice of his First Sea Lord, Lord Fisher, resisted the section of the Cabinet, represented by the powerful figures of Mr. Lloyd George and Mr. Churchill, who took this last view; and, supported by the Prime Minister and Sir Edward Grey, he persuaded his colleagues to begin the building of four battleships of the “Dreadnought” type in 1909, and to ask for power, if necessary, to prepare for the construction of four more a year later. This programme disgusted the Radical economists, but did not satisfy public opinion. The Unionists and other friends of a big navy carried on an agitation to the slogan, “We want eight, and we won't wait,” and eventually, on July 26, Mr. McKenna announced that the second four Dreadnoughts would definitely be ordered. The estimates of 1909 had shown an increase of nearly £3,000,000; those of 1910 showed a further increase of £5,500,000, mainly due to new construction. A still further increase of £3,750,000 in 1911 made it clear that Mr. McKenna and the Admiralty were in earnest in their determination to maintain “a fleet sufficient to hold the seas against any reasonably probable combination.” In June 1911 he was able to make satisfactory arrangements at the Imperial Conference for complete unity of action in time of war between Dominion fleets and those of the mother country. He could feel, when in the autumn he passed from the Admiralty to the Home Office, that he left behind him a much stronger fleet than he had found. As Home Secretary he had charge of the Welsh Church Disestablishment bill.
When war broke out in Aug. 1914 he had the arduous duty of safeguarding the country against the machinations of spies— a task in which it was impossible to give entire satisfaction to a sensitive public. When Mr. Asquith's Coalition Ministry was formed in the summer of 1915 he was made Chancellor of the Exchequer, and a still more difficult task was imposed on him— to find the money to carry on the war. By the 4½% War Loan a subscription of nearly £600,000,000 was obtained. He also raised a loan of £100,000,000 in the United States on the joint credit of England and France. In the autumn he introduced a supplementary war budget for the year, providing over £100,000,000 by new taxation. Income-tax was raised 40%, and the abatement and exemption limits lowered; the rates of super-tax were seriously heightened; all the old duties on sugar, tea, tobacco, cacao, coffee, motor spirit and patent medicines were almost doubled; the import of luxuries such as motor-cars, cinema films, clocks and musical instruments was restrained by an ad valorem duty of 331⁄3%; and an excess profits tax of 50% was imposed. Other methods of financing the war which he adopted were War Savings Certificates, which realized over £40,000,000 in their first year; 5% Exchequer bonds, replaced after a year for a short time by 6% Exchequer bonds; but for current expenses he relied mainly on the sale of Treasury bills, of which at the end of his period of office in Dec. 1916 there were over £1,000,000,000 outstanding. In his 1916 budget he raised taxation still further. Income-tax was increased to 5s. in the pound and excess profits tax to 60%; there were further increases on sugar, cacao and coffee; higher duties were imposed on motor vehicles; there were new taxes on amusements, railway tickets, matches and mineral waters. He calculated that the country was raising over £300,000,000 in the year by new taxation imposed since the war; and he budgeted for a net revenue of £502,000,000 to meet an estimated expenditure of £1,825,000,000. He enunciated the doctrine that Great Britain ought never again to be dependent for supplies or many essential commodities on a nation like Germany which in peace had plotted and prepared for war; and he said that Government was prepared to assist the development of British foreign trade.
Mr. McKenna went out of office with Mr. Asquith in Dec. 1916, and, along with other Liberal leaders who had refused to serve under Mr. Lloyd George, lost his seat at the General Election of Dec. 1918. He made no attempt to reënter the House, but accepted the position of chairman of the London City & Midland Bank in 1919. He speedily gained a position of financial authority in the City. He married in 1908 Pamela, daughter of Sir Herbert Jekyll, and had two sons. (G. E. B.)