5

2nd April, 1924

Dear Mr. Bruce,

LORD PARMOOR [1]

In my last communication I referred to a letter that appeared in the Yorkshire Press purporting to be signed by Lord Parmoor. This gave rise to considerable temporary excitement in political circles and Mr. Baldwin [2] secured time for a debate on the subject in the House. Unfortunately Mr. Baldwin entrusted the matter to Sir Philip Lloyd-Greame [3] who made an extraordinarily ineffective party speech instead of leaving party a little in the background and making a weighty protest against the reflection on the preference policy of the Dominions and on the idea of debasing the Wembley Exhibition to a fiscal controversy. [4]

Sir Philip Lloyd-Greame's speech was of such a nature as to give to the Prime Minister [5] a golden opportunity of making an effective rejoinder which Mr. MacDonald was not slow to take. Mr.

MacDonald said that Lord Parmoor had neither seen nor signed the letter, but Mr. Yenkin [6], who is closely associated with Lord Parmoor, told me privately that the old gentleman did not know whether he had or had not signed the letter and that the views expressed in it closely represented Lord Parmoor's own point of view.

The way in which this matter was handled by the Unionists made me regret having had anything to do with it at all and confirmed my feeling that the Unionists have a fearful and wonderful lack of brains and ability.

THE LABOUR PARTY AND EMPIRE

There has, as yet, been no definite move towards the formation of an Empire Parliamentary Group inside the Labour Party but I am continuing to meet individual Labour Members and you will be very interested to know that among some of the Trade Unionist Members there is a quite clear realisation of the fact that if Labour conditions are to be maintained in this country, some form of protection will be essential.

I have found among Trade Unionists a very sympathetic attitude on the subject of the preferences that Australia and New Zealand are giving to Great Britain and on the Preference Proposals of the late Government. They all state that the main trouble is the foolish attitude that so many present Ministers allowed themselves to adopt in their election speeches. If it had not been for that, the Labour Party would have been able to have accepted the bulk of the Preference Proposals without much difficulty.

Some of these Trade Unionist Members have expressed the view that a re-orientation of the Labour Party's attitude to the Safeguarding Industries Act [7] and other protective measures may take place in the near future. They point out, for instance, that at the present moment men employed in what are known as the sheltered trades, i.e. the trades that have no export and therefore do not compete in the world's market, are paying higher wages to unskilled men than the wages that are paid to skilled engineers in industries that have to compete overseas and that this is an intolerable position for a skilled operative.

For instance, in London, the tram driver is, I am told, receiving about 17/- a week more than a fitter employed on engineering work.

I am finding that the statistical information that I am able to place before Trade Union Members about the value of the Australian and New Zealand Market and the effect on British trade and the Australian and New Zealand Preferences is very marked indeed and I am becoming convinced that if we can arrange to continue this propaganda in Labour quarters, we shall be able to get the majority of the Labour Party to realise that it is essential in the interests of British trade to adopt a policy which will induce the Dominions to continue giving substantial preferential advantages to Britain.

THE ECONOMIC PREFERENCE PROPOSALS

Sir Howard d'Egville [8] told me yesterday that he had had lunch with Mr. Clynes [9] and that Mr. Clynes had stated that the Government intended to incorporate some of the preference proposals in the Budget and that those which were not incorporated in the Budget would not come before the House of Commons until after the Budget had been introduced. I am going to suggest to Sir Joseph Cook [10] that he should cable you to this effect.

THE IMPERIAL ECONOMIC COMMITTEE

I have discussed the Imperial Economic Committee with several Liberal Members and I think that they are tending to see that it would be an advantage from their point of view to have an Ad Hoc Body which could investigate all methods of fostering Empire trade apart from methods involving tariffs.

LORD ISLINGTON

I had a couple of hours with Lord Islington who, although a Liberal Peer, intends to take a very definite attitude in the House of Lords in favour of the whole of the preferences. He was delighted to find what an extraordinarily strong case could be made out and, at his request, I am preparing the matter for his speech.

ENCLOSURES

I enclose a copy of a letter to the Financial Times on the effect of the Australian Preference to British Trade. [11]

TRADE STATISTICS

Under separate cover I am forwarding by this mail a diagram showing British trade with countries from 1870-1922. I think this is an original research and the result is very interesting and should prove the basis for excellent propaganda.

Yours sincerely, F. L. MCDOUGALL

1 Lord President of the Council.

2 Stanley Baldwin, Leader of the Opposition.

3 Conservative M.P.; President of the Board of Trade 1922-24.

4 For a report of the debate, see House of Commons, Parliamentary Debates, fifth series, vol. 171, cols 818-37 5 Ramsay MacDonald.

6 Presumably Arthur Yencken, Australian-born diplomat, then private secretary to Lord Parmoor.

7 The Safeguarding of Industries Act 1921 imposed protective duties for five years on foreign goods competing with industries of 'great national importance' and for three years on goods likely to be dumped on the British market, particularly those produced in countries with depressed currencies. The Labour Party opposed renewal of the three-year provisions.

8 Secretary of the United Kingdom branch of the Empire Parliamentary Association.

9 J. R. Clynes, Lord Privy Seal.

10 Australian High Commissioner.

11 Signed by Sir Joseph Cook and published on 1 April, it refuted a claim that the Australian tariff excluded British goods despite preference for Empire products.