It was triggered by the death of the town's Labour MP, Albert Bellamy, and resulted in a victory for the Conservative candidate, Col John Broadbent.
The furious crowd on the market ground by the town hall shouted down Mosley as he tried to speak after the declaration, calling him a traitor and blaming him for Labour's defeat.
He is reputed to have said to his aide, John Strachey: "That is the crowd that has prevented anyone doing anything in England since the (First World) War."
However, the Ashton Reporter felt that these were artificially swelled by the many girls who wanted to admire the clothes worn by the glamorous Lady Cynthia.
The Labour Party hoped to hold the seat, and narrowed its choice of possible candidates to two: Stan Awbery, an activist in the Transport and General Workers' Union, based in Wales, and John William Gordon, an Irish-born Catholic who was chief accountant of the National Union of Railwaymen.