11

26th February, 1925

PERSONAL & CONFIDENTIAL

Dear Mr. Bruce,

1 . IMPERIAL ECONOMIC COMMITTEE

On the 23rd instant I received the following cable:-

Sir Mark Sheldon [1] has accepted position senior Australian Representative Imperial Economic Committee and Government invites you to act as Australian other representative during initial portion work of committee (stop) Will be glad receive urgent advice as to whether you are willing act.

I immediately cabled you in the following terms:-

Reference your cable 23rd Imperial Economic Committee shall be glad to act as desired by Government.

I am assuming that your intention is to vary the Australian representation on the Committee from time to time so as to secure the presence of experts who may be available in London. I shall await, with very much interest, a letter from you on this subject.

I heard from Alan Ritchie [2], who tells me it is probable that he will be coming over to undertake certain work in connection with the Economic Committee.

Sir Mark Sheldon has been out of London since the announcement of the Australian appointments and I have, therefore, not yet had an opportunity of seeing him. I should like to assure you that I shall do everything in my power to assist Sir Mark and I have particularly noted the fact that he is the Senior Representative.

I hope that you will make it clear, in the near future, as to how you propose to provide for continuity in the work of the Australian Representatives.

2. MEMORANDUM ON THE VALUE OF EMPIRE MARKETS

I sent a copy of my memorandum, a copy of which was forwarded to you on the 5th February last, to Mr. Baldwin [3] and I ventured to suggest to him that if he considered the document of sufficient interest, it might be desirable for him to pass it on to the Chancellor of the Exchequer. [4] I have received a letter from Mr.

Baldwin stating that he read the memorandum with the greatest interest and has passed it on to the Chancellor of the Exchequer with a word of recommendation.

I am particularly glad that this has happened, because I am most anxious to get the facts in relation to Empire trade and the efforts which Australia has made in this direction prominently before the Chancellor before he makes his Budget Speech.

3. THE LABOUR PARTY AND FISCAL POLICY

Since my last letter, a very important development has taken place. I am enclosing cuttings of an article by the Rt. Hon. John Wheatley [5], M.P., and another by Mr. Tom Johnston [6], M.P., which were published in 'Forward' of February 21st. This paper is the organ of the Scottish Labour Party.

On Tuesday last, Mr. Tom Johnston had lunch with me and told me that he anticipates getting 50% of the Parliamentary Labour Party behind Mr. Wheatley and himself in this new attitude to the importation of sweated goods. [7] Mr. Johnston states that, during the initial stages of this new movement, he intends to concentrate upon a definition of sweated goods as being goods produced in countries in which the 48 hour week is not operative. For the time being he intends to avoid complicating the subject by any reference to wages or conditions of work other than the 48 hour week.

I was very interested to hear from Mr. Johnston that so staid a free trade member of the Labour Party as Mr. Arthur Henderson, the late Home Secretary, had stated that it would be impossible for the Labour Party to resist the point of view which Mr. Wheatley and Mr. Johnston were now advancing.

I propose quietly to keep in as close touch as possible with this movement because its full implications are obviously of such great interest to Australia.

I hope to be able to advise you, within the next week or fortnight, as to what effect this new development of the Labour Party will have upon the British Government's attitude as regards fiscal preference.

4. ROYAL COMMISSION ON FOOD [8]

Many of the newspapers arc complaining of the way in which Sir Auckland Geddes [9] is acting as Chairman of this Commission. The Labour Party is also up in arms on the same subject. The complaints are to the effect that the Commission appears more anxious to safeguard vested interests than really to probe the problem. One hears comments from all quarters as to the extraordinary way in which Lord Vestey [10] was allowed to state his case, without effective cross-examination.

So far as I have been able to observe, Sir Halford Mackinder [11] has also adopted an intensely conservative attitude. The Commission has examined many witnesses in private and it is impossible to say what conclusions will be reached but I think you will be interested to know that, at present, well informed people do not anticipate much progress as a result of the Commission. If this proves correct, it will intensify the need for careful and thorough work by the Imperial Economic Committee which, I assume, will have the advantage of working in private.

Yours sincerely, F. L. MCDOUGALL

1 Prominent Sydney businessman.

2 Victorian grazier.

3 Stanley Baldwin, Prime Minister. The letter Of 5 February has not been found.

4 Winston Churchill.

5 Minister of Health 1924.

6 Editor of Forward.

7 See Letter 10.

8 The Royal Commission on Food Prices, appointed on 29 November 1924.

9 Chairman of Rio Tinto Co.; Ambassador to the United States 1920- 24.

10 Businessman with interests in meat importing and shipping.

11 Former Conservative M.P.; member of the Royal Commission on Food Prices.