23rd November, 1927
PERSONAL & CONFIDENTIAL
My dear Prime Minister,
Many thanks for your letter of the 17th of October.  I was glad to see that you thought that the question of the importation of Alsatians into Australia was one worthy of your attention.  I am also glad that you found my memorandum on the Economic Importance of Pastures useful. I think there is a great deal to be gained by breaking up the general phrase 'Agriculture' into sections of large economic importance. Pastures are of such immense significance to Australia that it ought to be possible to kindle the public imagination for the application of research to their improvement.
May I suggest that when Dr. Orr  reaches Australia, you would find it well worth while to arrange for him to meet your Private Committee of Pastoralists  to discuss the whole pasture problem with them? May I also add to the suggestion that I made in my last letter about your meeting Orr that it would be just as well if you would arrange to see Orr without Sir Arnold Theiler?  Theiler and Orr will get on extremely well together but Theiler has rather a dominating personality and would be almost certain to carry the conversation on to animal pathology, whereas I am quite sure that one of the subjects that you could most fruitfully discuss is pasture improvement and animal nutrition-Orr's particular strong points.
I very much regret that, owing to an oversight, the memorandum on 'Concentrated Fodders in Australia' was omitted from the enclosures which accompanied my last letter. I am enclosing a copy herewith.
IMPERIAL AGRICULTURAL RESEARCH CONFERENCE
The High Commissioner  handed me today a copy of your cable in which I was very glad to see that you had, on behalf of the Commonwealth Government, expressed to the British Government the appreciation which you felt at the successful outcome of this Conference.
An interesting article, signed by Dr. J. H. Grisdale, the Deputy Minister of Agriculture in Canada, appeared in the 'Times' of the 22nd November and I am enclosing a Copy. 
EMPIRE MARKETING BOARD AND AUSTRALIA
This week I have received a cable from Rivett  intimating that both you and Sir George Pearce  are anxious that every effort should be made to get the Empire Marketing Board to co-operate with the Commonwealth Council for Scientific & Industrial Research on Australian entomological problems.
The Empire Marketing Board has already allotted 76,800 towards entomological research within the Empire and has actually done considerably more for this science as a whole than for any other branch. However, in view of the strong feeling in Australia, I felt it desirable to take an early opportunity of sounding Major Walter Elliot , as Chairman of the Research Grants Committee, on the whole question of E.M.B. financial co-operation with Australia during the coming year.
I had a very long talk with Elliot last night on this subject and pointed out to him that, as was almost inevitable, the lion share of the eighteen months' research grants made by the Board had gone to British Research Stations. In most cases the intention of the grant has been to enable British Stations to extend their activities into the Imperial field. Nevertheless the mere fact of this research work being actually done in the United Kingdom should mean that British agriculture will derive a larger degree of benefit from these grants than will be the case in any other part of the Empire.
Secondly I pointed out to Elliot that, as far as one could judge, at least another twelve months would elapse before the Dominions of Canada and South Africa, or the Government of India, were likely to approach the Empire Marketing Board for financial co- operation on any very large scale.
Thirdly I produced figures to show that the Tropical Colonial Empire had already received handsome allocations and there was no particular need for the Board to do very much in that direction in the near future.
Fourthly I was able to show that, in spite of the British Government having reduced the first year's grant to 500,000 and of the decision temporarily to withhold a portion of the 1,000,000 for the present financial year, yet the Board had allocated considerably less than its income and that, with the unexpended portion and the income of the 1,000,000 for the financial year 1928-29, there will be scope for large scale schemes in the immediate future.
Fifthly I pointed out to Elliot that the logic of the situation suggested that, as the two Dominions of Australia and New Zealand were willing and anxious to co-operate to the fullest possible extent in the scientific attack on Empire problems and desired to receive the financial co-operation of the Empire Marketing Board, the Board should be willing to entertain any sound proposals coming forward from these two Dominions.
After carefully considering the position, Elliot said that he agreed with my point of view. He felt, however, that while the Empire Marketing Board would be well advised substantially to support Australia and New Zealand during the next twelve months, he was a little anxious not to make too many commitments which would tie up the Board's income over a long period. He, therefore, suggested that some at least of the Australian schemes should be based on a 50-50 capital grant and a 50-50 maintenance for a period of say three years. At the end of that time the grant from the Board should be reduced from 50% to 25% with the intention of the gradual elimination of the Board's assistance from certain schemes within the course of from five to ten years.
In view of the apparent anxiety both of the Commonwealth Government and of the Commonwealth Council for Scientific &
Industrial Research for financial co-operation, I thought it advisable to send Rivett a private cable today giving him briefly the gist of this conversation with Elliot.
After this talk with Elliot, Dr. Orr joined us and we dined together in the House of Commons in order to discuss Orr's forthcoming visit to Australia.
It was agreed that, in the event of the Executive of the Commonwealth Council and Orr agreeing that it was urgently desirable for the Empire Marketing Board to take early action on any problems connected with Orr's visit, Orr should cable privately to Elliot a recommendation which would immediately be brought before the Research Grants Committee of the Board.
There is little doubt that, at the present time, if Elliot and myself are both convinced of the desirability of the Empire Marketing Board making any particular grant towards research, there is the highest probability of that grant being accepted by the Board as a whole.
I feel sure that you will be interested to hear of the extremely high opinion the people of this country have formed of the two members of the Executive who have been over here recently. I have already conveyed to you the sense of the way in which people here regard julius  but you are probably not aware of the laudatory opinions which Richardson  earned during the Imperial Agricultural Research Conference.
I was very interested to hear Orr say last night, with Elliot's complete concurrence, that Richardson, as a director of scientific research, probably had only one or two equals in the British Empire.
I do not think Richardson is regarded as being a very highly scientific person himself but his vision and commonsense and his ability to bring constructive ideas into any discussion have profoundly impressed those who are interested in the development of agricultural science.
As you know I have not met Dr. Rivett but I am receiving a constant stream of letters from him, both of a personal nature and also of a more official type and from these letters I should judge that in Rivett you have selected a magnificent Executive Head of this Organisation. With Julius, Richardson and Rivett working together as a team, I feel that you are to be most warmly congratulated on having made a selection which would be hard, if not impossible, to beat.
In a letter from Dr. Rivett dated the 17th of October, he told me that you had enquired from him as to how the interchange of information between my office and the C.C.S.I.R. was progressing.
I can only say that I wish that I was receiving from the Development & Migration Commission anything like the same volume and value of information. I realise, however, the immense task that Gepp  has undertaken and I am naturally prepared to be very patient in this matter.
In the 'New Statesman' of November 19th there appeared an intelligent article entitled 'The case for Trusts'. This seemed to me a matter which is sure to engage your attention at some time. I am, therefore, forwarding the article which you are likely to read with interest.
In my last letter I told you that Sir Edward Hilton Young  had strongly urged me to let him have an article for the 'Financial News' on the effect of Dominion Tariffs on British Trades. The article appeared on Tuesday and I was naturally pleased with the prominence which Hilton Young gave it in his paper. I am enclosing a copy of the article which, although it contains little that is new, yet puts the position from a slightly different angle and may perhaps be worth your glancing at.
In conversation with Elliot last night, I tried to find out from him whether he could explain why the Government Spokesmen, and in particular Winston Churchill  and the Prime Minister , are insisting upon taking a highly optimistic view of the prospects of British trade.
Elliot replied that he was unable to understand the attitude, especially as confidential memoranda from the Ministry of Labour said that it was probable that there would be an increase in unemployment during the next few months rather than any further decrease. He pointed out that, apart from the short Labour interregnum, many of the Ministers had been continuously in office since 1917 and that there was, therefore, an almost inevitable tendency towards laissez-faire. Elliot explained, at some length, the impracticability, in his present position, of taking any action to stimulate the Government towards a greater display of constructive ability. He said that the younger Tories were profoundly dissatisfied with the situation but he did not think there was any feeling that a revolt from within the Party would be likely to be successful.
Some of the newspapers have recently been discussing what would happen to the Labour Leadership in the event of MacDonald's  health causing his retirement. Very much to my surprise, two or three newspapers mentioned the possibility of Tom Johnston  being actually selected as Leader. I, personally, do not consider that there is any possibility of this occurring for some years but I should be by no means surprised if, in the course of time, Johnston emerges as a Leader. With all his disadvantages of lack of education and of that ingrained suspicion which is the worst failing of so many members of the Labour Party, Johnston has a really constructive mind and, I am glad to say, has become thoroughly convinced of the immense importance to Great Britain of Empire development.
Personally I do not anticipate that MacDonald will resign. He is not only ambitious but also vain and it is, I think, generally recognised in the Labour Party that the problem that would face them in the event of MacDonald leaving the Leadership would be so difficult that it is highly improbable that any section of the Party would press for his resignation.
AUSTRALIAN KNOWLEDGE OF THE EMPIRE MARKETING BOARD
Tallents , the Secretary of the Empire Marketing Board, tells me that by this mail he received a letter from Huxley  in which Huxley said that, at Perth and Adelaide, the State Governments appeared to have no knowledge of any sort of the Empire Marketing Board.
This, frankly, is a little disconcerting. I have advised, I imagine properly, that the Empire Marketing Board should address all communications to Australia to Commonwealth Bodies and the Board is in regular correspondence with the Department of Markets & Migration and, of course, with the Commonwealth Council for Scientific & Industrial Research. I had assumed that Markets &
Migration would have kept the State Governments informed. The Board sends large masses of printed matter to the Department of Markets & Migration and I think fifty copies of each set of posters. Probably already, as a result of Amery's visit and Huxley's talks to Mulvany , this has been remedied but I am sure you will agree that it is most desirable that the public, and especially the farming community, should understand the work of the Empire Marketing Board.
I think a set of a special poster in map form showing the purchases of British goods by the Southern Dominions in contrast to the West and East of Europe will either reach you by this mail or else by the next. This set is my own special poster, and I should like to know your comments. It will be displayed here in about a fortnight's time on the 1,200 special oak frames which have now been erected in London and all towns of over 1000.000 population. I think the contrast is so vivid that it must teach a lesson.
THE EMPIRE & BRITISH FINISHED GOODS
I have prepared for the education of the Empire Marketing Board a statement showing the proportion of fully manufactured goods purchased by Empire countries out of the total British export of these goods. It is quite brief and I enclose a copy which is worth your attention.
Yours sincerely, F. L. MCDOUGALL