Dear Mr. Bruce,
Since my last letter, I have been in almost daily touch with Mr.
Amery  and Sir Howard d'Egville.  Through the agency of the former, a series of questions were asked on preference in the House of Commons, which elicited a written answer from Mr. Sidney Webb, the President of the Board of Trade, a copy of which I am forwarding in the enclosed Hansard, Pages 519 to 524. 
Through Sir Howard d'Egville I am meeting almost daily members of the House of Commons, the two most interesting interviews that I have had being Dr. Haden Guest , M.P., who holds a junior position in the Labour Government but who is certain to hold high office in the next Labour Government, and Sir Edward Grigg, who, as you know, is a 'Lloyd George' Liberal.  Both these gentlemen expressed their intention of speaking in favour of the preference proposals when the discussion comes on in the House of Commons, and I have provided them both with a mass of material on the subject.
I strongly suggested to Dr. Haden Guest that he should endeavour to form a group of the Parliamentary Labour Party to study Imperial problems and thus create an opportunity for propaganda within the Party. Dr. Haden Guest thought the idea an excellent one and hopes to be able to do something on those lines.
During the last fortnight I have also been in very close touch with Sir Joseph Cook  and accompanied him to meet the newly formed Liberal Colonial Group in the House of Commons.
Unfortunately only a very small number of members of this group turned up to hear Sir Joseph, who spoke at very considerable length on preference and the Imperial Economic Committee.
On receipt of your cable enquiring the present attitude of the Government on the Imperial Economic Committee and on the preference proposals, Sir Joseph Cook invited me to assist him in obtaining the necessary information in order to reply to you and while Sir Joseph was with the Colonial Secretary  I saw Mr.
Clynes  and other Members of the House. Mr. Clynes' statement about the Imperial Economic Committee was that the question had been decided at the one Cabinet Meeting at which he was not present and that it was obvious that he regretted the decision that had been taken.  Mr. Clynes also made it clear to me that he very much hoped that those portions of the preference proposals that meant no substantial increase in duties would be implemented by the House.
I have formed the impression that the chief obstacle to the Imperial Economic Committee, and probably one of the most dangerous men in the Government, from the preference standpoint, is Lord Arnold, the new Under-Secretary of State for the Colonies.
Lord Arnold is a very new recruit to the ranks of labour and prior to his joining the Labour Party a year ago was a very strong determined free trade Liberal. Mr. Clynes has promised to arrange for me to meet Lord Arnold when I hope to be able at least to demonstrate to him the overwhelming case for the Government adopting an attitude that would not be regarded as hostile in the Dominions.
So far as I am able to gather at the present moment, when the Imperial Economic Committee is discussed in the House of Commons, there is every probability of a number of Liberal and Labour M.P.'s speaking and voting in favour of the proposal and although it is impossible to say whether it is likely to be carried, I am of opinion that it is by no means impossible that this will happen.
The 'Daily Telegraph' and the 'Times Trade Supplement' published leading articles on the subject of the Imperial Economic Committee, of which I send you copies herewith.  I also forward a copy of an article that I wrote for the 'Yorkshire Post' on the effect of preference on the British Woollen Industry.
Yours sincerely, F. L. MCDOUGALL