148

16th February, 1928

PERSONAL & SECRET

My dear Prime Minister,

I find I have been somewhat remiss in not writing to you about the British Government's proposal to use the Empire Marketing Board's fund for advertising the British Industries Fair. Presumably the matter is now closed but I ought to have written to you before and I think I had now better let you have a brief summary of what happened.

About six weeks ago, Ormsby-Gore [1] who was Acting Chairman of the Board, told me that the Cabinet had asked him to put before the Board a proposal that 25,000 should be made available from the E.M.B. Vote for advertising the British Industries Fair. He told me that he had replied to the effect that he thought that the Board would very much dislike the proposal and that Overseas Members, and particularly McDougall, should be sounded before any such proposal was put forward.

The next step was that Sir William Clark, the Permanent Head of the Department of Overseas Trade, who is responsible for the British Industries Fair, asked me to lunch to discuss the question. I told him quite frankly that if any such proposal was brought before the Board, I should feel bound to oppose on the ground that a precedent would be created which might have very far reaching effects and gradually tend to an irresistible demand on the part of manufacturers for the general advertising of British manufactured goods out of the E.M.B. funds.

I am quite sure that Sir William Clark agreed that the proposal was a dangerous one. I understand he did not consult any other overseas member of the Board and apparently the Cabinet decided not to bring the matter before the Board.

I thought that this stupid suggestion had lapsed when I was very confidentially informed that the Government was cabling to the various Governments of the Empire asking for their concurrence in this proposition. I then thought it desirable to send you a secret cable on the subject.

On Monday, the High Commissioner [2] showed me a copy of the cable from the Secretary of State [3] to you and your reply. [4] I cannot imagine that, after receiving your reply, the British Government will continue to press this suggestion. What amazes me is the extraordinarily stupid attitude of the British Government.

The 1,000,000 a year was the result of a careful estimate made by the Customs and Treasury as to the value of the promised preferences during the year 1924 had they been put into operation.

The inclusion of British Agriculture in the ambit of the vote has involved very considerable inroads on the funds but I am strongly of opinion-and I know that you concur-that it was desirable that British agriculture should be included. The recent attempt to insert the thin edge of the wedge for British industry seems to show a complete lack of understanding.

I understand that Amery, who was informed of this proposal only after the British Government's cable had actually been despatched, was furious. [5]

Yours sincerely, F. L. MCDOUGALL

1 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies; Chairman of the Publicity Committee of the Empire Marketing Board.

2 Sir Granville Ryrie.

3 Secretary for the Colonies and for Dominion Affairs, and Chairman of the Empire Marketing Board, Leopold Amery.

4 On 28 January, in a circular cablegram to the Dominions, the British Prime Minister, Stanley Baldwin, suggested that the 25 000 provided annually by the Government for the British Industries Fair be taken in 1929 from the Empire Marketing Board fund. Bruce replied on 3 February that he was reluctant to press his objections since the whole of the Board funds were provided by the British Government but that he felt strongly that such provision would constitute 'a dangerous precedent'. On 15 February, Dominion governments were informed in a circular cablegram from Baldwin that provision in the Budget for the Board would be cut to 500 000, although the balance of 1 million could be made available if necessary, and that it had been decided not to proceed with the proposal to finance the British Industries Fair from Board funds.

Amery's cable of the same date to Bruce amplified this Cabinet decision, but added: 'I was...asked to let you know that whilst we quite appreciate the force of the considerations urged by you...even in the interests of the Dominions themselves it is undesirable for us to take too narrow a view of the directions in which expenditure from Empire Marketing Board funds is justified, if a looser interpretation may help to avoid rendering expenditure from the fund unpopular with the tax payers here who provide the money'. All these cables are on file AA:A461, H323/1/9 5 In a letter dated 20 March, Bruce remarked, 'The whole idea was an idiotic one, and it is a very great pity that the point was ever raised'. The letter is on file AA:M111, 1928.