6th March, 1928
PERSONAL & CONFIDENTIAL
My dear Prime Minister,
MANCHESTER CHAMBER OF COMMERCE
You will remember that the Annual Report of the Manchester Chamber of Commerce made a very vigorous attack on Australian economic policy, particularly alleging that the Australian Tariff was having a most detrimental effect on British trade.  You may also recollect that some months ago the President of the Manchester Chamber of Commerce had an interview with the High Commissioner  and you may have read the carefully considered statement that the President then put up.
On Monday I went down to Manchester and had a private meeting with the President and Directors of the Chamber of Commerce. There were about 16 present and, after asking if they would regard the meeting as strictly confidential and if I might deal with subjects with the utmost frankness, I proceeded to tell them that I thought that it was deplorable that the most influential Chamber of Commerce in the United Kingdom should be guilty of such loose thinking and loose writing as to make the sort of statements, of which they had been guilty.
After dealing with some of their more glaring misstatements, I drew attention to a phrase used by the President of the Chamber in addressing the High Commissioner when he said the Chamber acknowledged that, up to the present time, the Australian tariff had had no seriously detrimental effect on the Lancashire cotton industry. I invited them to regard this as an example of what I described as grossly loose thinking, because, in actual fact, the Australian tariff had immensely assisted the Lancashire cotton industry. To clinch this point, I quoted the following very effective statement:
Argentina buys from the world a larger volume and value in cotton goods than does Australia but Australia obtains 85% of all her cotton goods from Great Britain, whereas the Argentine only obtains 38%. As a result Australia provides a market to Lancashire worth 8 millions a year while the Argentine buys only 4 millions a year.
After dealing very faithfully and directly with the Chamber, I then went on to make some suggestions as to the way in which people with strong free trade convictions could yet help rather than hinder Empire economic deliberations. I suggested to them that they should drop this absurd criticism of Dominion tariffs as being detrimental to British trade and concentrate more on the idea that the tendency of the Dominion to make haste quickly in the matter of the development of secondary industries under the protection of high tariffs was probably delaying the development of the Dominions and that British Chambers of Commerce, representing great industries, while greatly acknowledging any benefits that they received through Dominion Tariffs, yet could not avoid a feeling of alarm lest the far more important question of rapid Empire development might be delayed and temporarily frustrated by ill-considered methods.
I am quite certain that this meeting was extremely useful and I think I managed to carry conviction. It is improbable that the Manchester Chamber of Commerce will be guilty of gross misstatements in the near future.
By this morning's mail I have received a very pleasant letter from the President of the Manchester Chamber of Commerce, from which the following is an extract:-
I am expressing the feelings of all my friends and colleagues who took part in our interesting discussion yesterday when I say that the Chamber could not let the occasion pass without sending you a written expression of their thanks and appreciation for the trouble you took to visit us and help us to understand certain difficult aspects of the principle of Anglo-Australian Trade Relations.
We shall all derive much benefit from our exchange of views and besides thanking you very sincerely, I want to seize the opportunity to say that whenever you feel that good purpose might be served by a further friendly and intimate discussion, I hope you will let us know.
You may find that a turn in the state of affairs might create an opportunity for the Manchester Chamber to make useful publicity in this or that direction. Other circumstances might arise to render another talk between us desirable. I do want you to feel that you can rely upon a hearty welcome in Manchester whenever you can spare the time to visit us. 
LORD RAWLINSON'S  WAR DIARIES
For the last week the 'Daily Telegraph' has been publishing extracts from Lord Rawlinson's War Diaries edited by General Sir Frederick Maurice.  I am enclosing the extracts that appeared on Tuesday and Wednesday because they contain such generous tributes to the achievements of the A.I.F. Nothing surprises me more than the extraordinary display of sensitiveness which occurred in Australia over the rumour that the official history of the War gave inadequate recognition to the achievements of the Australians in the Dardanelles. I was rather shocked at the way in which Monash  allowed his name to be associated with this protest. Wherever I have gone in this country I have never heard anything except the warmest and sincerest praise of the A.I.F. as a wonderful fighting force. If you have not received these extracts from any other source, I am quite sure that you will find them extremely interesting and useful.
I have written to you at considerable length on this subject  and have enclosed a spare copy of my letter as I think you may desire to send it to Mr. Paterson.  Great pressure on my time today will prevent my writing at great length to Mr. Paterson on this subject. I am just sending to him copies of the statements prepared for Mr. Amery. 
THE EMPIRE AND BRITISH EXPORT TRADE
With reference to the article which appeared in the 'Times Trade Supplement', of which I sent you a copy by last mail, I am now enclosing a copy of a leading article which appeared in this week's issue and in which the points which I made in my article are rubbed in editorially.
The results of two By-elections were announced this morning. In one case-St. Ives-the Liberals have won a seat from the Conservatives by a majority of 700. This, of course, is simply a return to normal form for the far west of Cornwall has always been a Liberal stronghold. Mrs. Runciman , who is the new member, declined to receive any assistance from Mr. Lloyd George  and repeatedly declared, in her election campaign, that she did not recognise Mr. Lloyd George's leadership.
At Middlesbrough, where the late Liberal member had a majority of 9,400, the result of a triangular contest was that the Liberals have retained the seat from Labour by a majority of only 89, the Conservative coming third with about 2,000 votes less than Labour.
On the whole these two elections do not show any very clear indication of any substantial change of opinion, although St. Ives must be regarded as somewhat detrimental to the Government. It is, of course, possible that the election of Mrs. Runciman might re- emphasize Liberal disunion. One rather imagines that the amount of press publicity at present being given to the Zinoviev case  will have some detrimental effect on the Government until the matter has been cleared up.
Yours sincerely, F. L. MCDOUGALL