15

2nd April, 1925

PRIVATE & CONFIDENTIAL

Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

Since the last mail, there have been two further meetings of the Imperial Economic Committee. At both meetings, the Committee continued in their attempt to obtain a general birds-eye view of Empire trade. The method adopted by the Chairman [1] to attain this end is by the consideration of specially prepared memoranda which have been discussed with a Statistical Officer from the Board of Trade and with an Officer from the Department of Agriculture.

While there is little doubt that some such method was necessary to enable the Committee to obtain collectively a view of the general situation, the fact that three weeks have now passed and the survey is not completed appears to Sir Mark Sheldon [2] and myself to be rather serious.

At the last meeting it was arranged that the Committee should meet regularly on Tuesday afternoons and when considered necessary should continue its sitting on Wednesday morning. We may thus get one day a week instead of half a day. The Chairman also proposed, after Easter, to institute one or more Sub-Committees in order to accelerate the work. Out of the 18 members of the Committee only 4, or at the most 5, are anxious for meeting two complete days a week; the remainder quite naturally desire to fit the meetings of the Committee with their other duties and raise definite objections to more frequent meetings.

Sir Mark and I have discussed what we could possibly cable you in the way of information but as the Committee have so far considered no proposals, we have felt it impossible to send you any news.

At the last meeting there was one rather astounding proposal made by one of the British Representatives, that an immediate decision should be taken to expend a portion of the Million pounds for advertising Empire produce at Wembley Exhibition. This proposal was, however, immediately attacked by other British Representatives and each of the Overseas Delegations expressed a very definite view that it would be a quite unsuitable method to adopt.

I received last week a cable from Ritchie [3], sent by wireless to San Francisco from the 'Aorangi', asking me to advise him as to the urgency of his arrival in London. This is the first that I have definitely known of his coming over but I presume that he is on his way to London to undertake certain duties in connection with the Australian Delegation to the Imperial Economic Committee.

I replied that I thought he should reach London by the first week in May and I have written fully to him c/-Dermot Casey [4] at New York.

GREEK COMMERCIAL TREATY

I have seen a copy of your cable [5] to the Colonial Office on this subject and I have discussed the matter again with Sir Sydney Chapman, of the Board of Trade. He puts the matter in the following way:

He says that British commercial interests have pressed for a completion of a Commercial Treaty with Greece and that the Government felt in a very awkward political position. They are very loath to conclude a Treaty which will prevent any increase in the duty on currants but they feel that if asked in the House for their reason, [and] they stated that it might be desirable during the life of this Parliament to increase the preference, they would be regarded as being at least ready to contemplate playing fast and loose with the Prime Minister's [6] Election pledges.

It is regrettable that Amery [7] is away at the present time, because he, fortified by your cable, might have taken a rather definite line. Whatever the British Government may finally decide, there can be no doubt that your cable has done good as showing the keen interest which the Commonwealth Government takes in the matter.

In view of the information which I sent to you last mail as to the extremely insanitary conditions under which Smyrna sultanas and Greek currants are harvested and packed, I particularly impressed Sir Sydney Chapman to see that there was no clause in the Treaty which would hamper the British Government from imposing sanitary regulations upon the import of these goods from Smyrna.

LABOUR PARTY DEVELOPMENTS

There is nothing of any particular interest to report, except that a definite attempt will be made during the discussions on the Budget by the Labour Commonwealth Group to disassociate the Labour Party from Liberal free import ideas.

The group is being very active and I am keeping closely in touch with them.

I believe that Dr. Haden Guest [8] intends, during the Easter Vacation, to visit Smyrna and Greece, with a commission from one or more newspapers to write up the labour and sanitary conditions there.

EDUCATIONAL WORK IN PARLIAMENTARY CIRCLES

I was invited by the Trade Committee of the Empire Parliamentary Association to address them on the value of the Australian and New Zealand markets to Great Britain. There were about 30 members of all parties present and Philip Snowden [9] was in the Chair. I gave them a short address very carefully avoiding controversial subjects and this was followed by about an hour and a half's discussions which I think was of a decidedly useful nature. The most difficult point raised in the discussion was the question of what assurance Great Britain could obtain, in the event of her adopting a really strong policy to assist the marketing of Dominion produce in this country, that she would not find the extension of industrial processes in Australia would deprive her of a large proportion of the Australian market. I was happily able to show how, up to the present time, the Protective Tariff had, on the balance, largely assisted British trade.

CONSERVATIVE PARTY

Before Mr. Amery left England, he requested the Vice-Chairman and Secretary of the Conservative Imperial Affairs Committee to discuss with me the best method of educating members of the party in the importance of Empire trade. As a result of this discussion, they decided to set up a small working Sub-Committee to (1) examine the facts; (2) to arrange for the facts to be communicated in an effective form to the members of the Conservative Party; (3) to formulate a real policy of Empire development.

The Sub-Committee invited me to attend their first two meetings and useful discussions have taken place at two small dinners in the House of Commons. The second occurred last night, at which a very interesting suggestion was put forward by a member who is largely interested in the British Iron and Steel Trade. His idea was that, when the British public had been educated to realise the value of the Empire and had in consequence become ready to adopt a real Empire policy, that a Committee, such as the Imperial Economic Committee, should consider the whole question of manufacturing production throughout the Empire and that there should be, if possible, some form of selection of industries within the Empire, his idea being that while the Dominions would desire to maintain and protect their important manufacturing industries, it was not in their own interests nor in the interests of the Empire as a whole that every form of manufacturing production should be duplicated or triplicated within the Empire.

This suggestion was regarded by the other members of the Sub- Committee as being of great interest but as being far too advanced at the present stage of development.

MY BOOK

I have just heard from John Murray, who informed me that their expert reader has formed a most favourable impression of my book and that they desire to publish it. [10] They pointed out, however, that sales of a book of this sort are necessarily uncertain and that any definite orders for copies could greatly assist the position.

In my letter of the 12th March [11], I told you the way in which the book had been revised and I should be very glad if, on receipt of this letter, you would consider whether the Commonwealth Government would purchase a certain number of copies for distribution in this country. The book will probably be published price 5/-. I am forwarding by this mail, under separate cover, a copy of the typed script of the revised book. As I have not got any spare copies of the 4 graphs illustrating it, I cannot enclose these. I think copies were sent to you with the memorandum that I prepared on the value of Empire Markets.

MANUFACTURING PRODUCTION

I am enclosing some notes that I have very hurriedly thrown together on the world tendency in manufacturing production. I intend when I can find time to follow this matter up more fully but I thought that it might be of considerable interest to you at the present time to have these notes. The significance of them to Australia seems to me to be this-that while Australia intends to maintain the policy of protection and to shelter her manufacturing industries from the competition of other lands, yet in face of the facts set out in these notes, it is obviously far more to Australia's advantage to concentrate and encourage primary production than for her to attempt any rapid process of industrialization.

I will write to you more fully on this subject when I have been able to go more thoroughly into it.

Yours sincerely, F. L. MCDOUGALL

[Handwritten postscript]

With the full concurrence of Sir Mark Sheldon I am seeing a good deal of the Canadian representatives [12] on the Economic Committee with the idea of clarifying ideas between us.

1 Sir Halford Mackinder.

2 Senior Australian representative on the Imperial Economic Committee.

3 Alan Ritchie, Victorian grazier.

4 Brother of R. G. Casey; Private Secretary to Sir James Elder, Australian Commissioner in New York.

5 On 20 March, Bruce replied as follows to Amery's cable of 4 March (see note 16 to Letter 13): '... proposal to continue admission of currants at 2/- per cwt. viewed with regret by Commonwealth Government ... trust that means may be found to avoid disappointment of expectations founded on His Majesty's Government's undertakings at Economic Conference'. The cable is on file AA:A981, Treaties 282.

6 Stanley Baldwin.

7 Leopold Amery, Colonial Secretary.

8 Labour M.P. and writer.

9 Labour M.P.; free trader; Chancellor of the Exchequer 1924.

10 Sheltered Markets, A Study of the Value of Empire Trade was published by John Murray, London, in 1925.

11 Not found.

12 L. C. McOuat and J. Forsyth Smith.