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  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  showed me a copy of the cable from the Secretary of State  to you and your reply.  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. 
Yours sincerely, F. L. MCDOUGALL