The Great Depression plunged the government into a terminal crisis. The Cabinet agreed that it was essential to maintain the Gold Standard and that the Budget needed to be balanced, but were divided over reducing unemployment benefits by 10%. At first, Henderson gave strong support to Prime Minister MacDonald throughout the financial and political crisis of August. The financial crisis across Europe was worsening and Britain's gold reserves were at high risk. New York banks provided an emergency loan; but additional money was needed and to get it, the budget had to be balanced. MacDonald and Chancellor of the Exchequer Philip Snowden proposed cuts in unemployment benefits. Henderson rejected that solution and became the leader of nearly half the Cabinet. The Labour Cabinet decided to resign. The king implored MacDonald to remain and form an all-party National government that would make the budget cuts. MacDonald agreed on 24 August 1931 and formed an emergency National Government, with members from all parties. The new cabinet had four Labourites (now called "National Labour Party") who stood with Macdonald, plus four Conservatives and two Liberals. Labour unions were strongly opposed and the Labour Party officially repudiated the new National government. It expelled MacDonald and his supporters from the party. Henderson cast the only vote against the expulsions. Against his own inclinations, Henderson accepted the leadership of the main Labour Party and led it into the general election on 27 October against the cross-party National coalition. It was a disastrous result for Labour, which was reduced to a small minority of 52. MacDonald won the largest landslide in British electoral history, Yet again Henderson lost his seat, at Burnley. The following year, he relinquished the party leadership.