151

1st March, 1928

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

BUSINESS DELEGATION

In my last letter I briefly mentioned this matter. Last Friday I saw Lovat [1], who said that he was feeling much happier on the subject of the Delegation and thought that there was a reasonable prospect of his having now secured the team, which was to consist of Sir Harry McGowan [2], Sir Hugo Hirst [3], Sir Ernest Clark [4] and, possibly, Sir Arthur Duckham. [5] In regard to Sir Ernest Clark, Lovat said that he had received from Lord Ashfield [6] and also from Sir Hugo Hirst, most favorable accounts of his competency and ability for the type of task. He told me that Sir Ernest Clark had said that it would be rather difficult for him to leave for a six months' tour without pay and that, when this information came to Sir Hugo Hirst, Sir Hugo himself offered to pay 1,000 to Sir Ernest Clark because he felt that his presence on the Delegation would be so extremely useful. This rather munificent offer, which I believe is characteristic of Hirst, was, however, unnecessary because Lord Ashfield, on behalf of the Underground Combine, promised to make such financial arrangements with Sir Ernest Clark as to make it possible for him cheerfully to accept.

With regard to Duckham, who is in America at the moment, Lovat told me that he had been so strongly pressed by other members of the Delegation to secure Duckhams's services that he had sent several cables to Duckham urging him to accept provisionally and stating that if, at a date nearer the actual time of departure, Duckham found it really impossible to get away, he would undertake to see that you thoroughly understood the reasons which might impel Duckham to take such a decision.

Lovat told me that when the Delegation was definitely fixed, he was going to arrange for a small private dinner at his house at which he would like to get the members of the Delegation to meet Todhunter [7], one of the Directors of the Imperial Chemical Industries, and myself. He was good enough to say that he thought that Todhunter and I could give the Delegation a better idea of the dynamic possibilities of Australia than any other men in London.

Lovat also told me that he intended to urge on Amery [8] that the Prime Minister [9] himself should give instructions to Sir Warren Fisher [10] that two of the very best available Civil Servants should be attached to the Delegation as Secretaries.

I certainly feel that Lovat has done everything in his power to push the idea of a Delegation to a successful conclusion and whether he is successful or not, we are certainly somewhat in his debt.

PRESS ARTICLES

I am enclosing a copy of an article which I contributed to the 'Times Trade Supplement' reviewing the directions of British trade in 1927. I have illustrated this with a series of graphs somewhat on the same basis as those which I prepared a year ago. I am quite sure that if you have time to read this article and to study the graphs, you will find it quite interesting. I have sent about 50 copies to Members of Parliament and have already received a number of interesting replies. Philip Snowden [11] writes to express his interest and surprise at the figures: Page Croft [12] to congratulate Australia House on its broadmindedness in dealing with the Empire as a whole rather than in exploiting one Dominion.

The Empire Marketing Board is having moo copies of this article printed off by the 'Times' for them as a pamphlet for distribution to lecturers employed by the Board.

I am also enclosing a copy of the 'National Review' for March, in which you will find two articles which may interest you. The first is one by myself entitled 'Mutual Trade', in which I have very briefly stated the case for complementary rather than for competitive trade. I should particularly like to draw your attention to the reference to Disraeli's question in the House of Commons in 1838. [13] I hope you will read this article.

The other article in the 'National Review' is by Sir George Buchanan on Transport problems in Australia. [14] This is rather pessimistic but I am quite sure you will like to see what he has to say.

AUSTRALIAN FISHERIES

Following up the Fish Report of the Imperial Economic Committee, I am finding it necessary to devote a good deal of time to fisheries questions in order to supply the Development & Migration Commission with the type of information that they require.

I spent Monday last at Lowestoft with Sir William Hardy [15], the Scientist, and Moss Blundell, the Chief Inspector of Fisheries, inspecting the British Experimental Trawler 'The George Bligh' and discussing, in the evening, with the Ministry's Biologist and with Hardy and Blundell the most suitable type of experimental vessel for Australian purposes.

I am inclined to the view that if Australia is to develop a great fishery industry, it will be necessary, having regard to the high cost of living in Australia, to base the industry upon two principal ideas:

firstly, the utmost economy in the use of labour, which means the adoption of the most up-to-date fishing units equipped with labour saving machinery for treatment of the fish; and secondly, the complete utilisation of all parts of the fish-in other words the development of a fishmeal industry, the extraction of oil from the livers and intestines, and, quite probably, the utilisation of fish skins for leather.

There is a very interesting development of what is called a super trawler, which may be just the thing that Australia would need. It is quite in embryo at the present time but very ingenious machines for killing and splitting fish, for filleting and even for skinning, are already on the market. Unfortunately, however, they are of German origin but this, I think, cannot be helped.

CIVIL SERVANTS CASE

Casey [16] tells me that he is sending you the full 'Times' account of the report of the Warren Fisher Committee on the Gregory case. [17] It was an intensely interesting document which I have no doubt you will want to read carefully. [18] I am particularly interested in it because of the revival of the question of the Zinoviev letter. [19] The Labour Back Benchers are pressing extremely vigorously for a judicial enquiry into the whole circumstances of the publication of this letter.

I imagine that Ramsay MacDonald and some of the members of the Labour Front Bench are by no means keen that this enquiry should take place, because under any circumstances Ramsay MacDonald cannot figure in a very favorable light in connection with this historic epistle.

Baldwin has promised half a Parliamentary day for this discussion and it will be very interesting to see what happens.

CINEMATOGRAPH FILMS

I do not know to what extent you are interesting yourself on the subject of Empire Film developments. Gepp [20] had recently asked me to consult with Colonel Manning [21] as to the utilisation of D. & M. films in England. This, together with work on the Empire Marketing Board, has brought me into contact, to a certain extent, with the Empire Film movement.

Major Glyn [22] M.P. called to see me the other day to discuss a commercial proposition in which he is interested and he has sent me a letter on the subject, of which I am enclosing a copy. I shall be keeping in touch with this in order to advise Gepp.

Perhaps you would be good enough to let me know whether you desire me to forward any of such information. [23]

BUSINESS DELEGATION (FURTHER)

I have just had lunch with Casey and he was telling me of an interview that he had with J. H. Thomas [24], in which Thomas had urged the importance of including a Labour Representative with the Business Delegation. He had said that it was now rather late to secure the right sort of man owing to the preoccupation of the Labour Party with the next General Election. This reminded me very forcibly of the fact that, when I first heard of the Business Delegation at the end of the last Imperial Conference, I very strongly urged on Gepp that the opportunity to include one really firstclass Labour man who, on his return, would have an educational effect on the British Labour Party, was too good to be missed. I still feel that this is the case and that if a man who is really influential in the Labour Party could be taken to Australia, it would be very much to the good [25]

Yours sincerely, F. L. MCDOUGALL

1 Lord Lovat, Parliamentary Under-Secretary at the Dominions Office.

2 Company director; President and Deputy Chairman of Imperial Chemical Industries Ltd.

3 Chairman and Managing Director of General Electric Company Ltd.

4 Company director; Permanent Secretary of the Treasury of Northern Ireland 1922-25.

5 Chemical engineer prominent in the coal industry.

6 Chairman and Managing Director of the Underground Group of Companies; a director of Imperial Chemical Industries Ltd. Clark's directorships also included the Underground Group.

7 Benjamin Todhunter, the director responsible for Australian and South African interests.

8 Leopold Amery, Secretary for the Colonies and for Dominion Affairs.

9 Stanley Baldwin.

10 Permanent Secretary of the Treasury and Head of the Civil Service.

11 Labour M.P.; free trader; Chancellor of the Exchequer 1924 12 Sir Henry Page Croft, Conservative M.P.; Chairman of the Executive of the Empire Industries Association.

13 The National Review, vol. 151, no. 541, March 1928, pp. 85-9.

Benjamin Disraeli, Prime Minister 1868 and 1874-80, asked, 'Does the Right Hon. Gentleman imagine that the nations of Europe will be content to allow this country to remain the workshop of the world?'.

14 ibid., pp. 147-54; Consulting engineer specialising in harbour and transport work and author of 'Transport in Australia, with Special Reference to Port and Harbour Facilities' (in Commonwealth Parliamentary Papers 1926-27-28, V, pp. 81 ff. and 241 ff). The account of his findings concluded with a statement that an 'amazing improvement' would take place if politicians gave a free hand to the 'able and patriotic men of affairs in Australia'.

15 Director of Food Investigation, Department of Scientific and Industrial Research; Fellow of Gonville and Caius College, Cambridge.

16 R. G. Casey, Commonwealth Government's Liaison Officer in London.

17 The Committee, set up to investigate statements affecting civil servants mentioned in the case Ironmonger and Co. v. Dyne found that J. D. Gregory, Assistant Under-Secretary at the Foreign Office, had engaged in speculative transactions in foreign currency in a manner inconsistent with his obligations as a civil servant. Gregory was dismissed from his position in 1928.

18 Bruce considered that the obligations and standards of conduct of civil servants, as outlined by the Warren Fisher Committee, also applied to his own Ministers of the Crown, particularly the necessity for them to sever all business connections. See his letter dated 14 April on file AA:M111, 1928.

19 During the election campaign in October 1924, the Foreign Office came into possession of a letter purported to be addressed to the British Communist Party from Grigory Zinoviev, President of the Comintern. It contained advice on the conduct of revolutionary propaganda in Britain and seemed to compromise the Labour Government's policy of improving relations with the U.S.S.R. The then Prime Minister, Ramsay MacDonald, ordered a check on its authenticity and a protest to the Soviet Mission in London. J. D.

Gregory, among others, signed the protest, although it was the Permanent Under-Secretary, Sir Eyre Crowe, who ordered it and the letter to be sent to the press for publication. They were published four days before the General Election in which Labour suffered heavy losses. MacDonald believed that Gregory was party to deception in the matter, but this was never proved.

20 H. W. Gepp, Chairman of the Commonwealth Development and Migration Commission.

21 C. H. Manning, Director of Migration and Settlement, Commonwealth of Australia.

22 R. G. C. Glyn, Conservative M.P.

23 Bruce commented (in the letter cited in note 18) that Glyn's letter did not impress him and that it would be a long time before a 'great British film industry' would be established.

24 Labour M.P.; Colonial Secretary 1924.

25 Bruce replied (in the letter cited in note 18) that it was too late to include a Labour representative and that, in any case, he did not 'quite see how, a Labour mark would have fitted into the picture'.