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My dear Prime Minister,

This week there is no regular mail but a supplementary goes via America. I have already written you a brief communication about the Manchester Chamber of Commerce. [1]

I have now to acknowledge your long letter started on the 16th January and completed on the 8th March. [2] It is unnecessary for me to tell you how much I appreciated receiving this. After a few months have elapsed without my having any response from you, I subconsciously start to wonder whether I have at length succeeded in boring you with the flow of matter which I maintain. I entirely understand that it is not possible for you to write at all frequently. Your letters, when they arrive, are, therefore, all the more welcome. There are one or two points in your communication on which I would like briefly to comment.

As regards the idea of a short book on Australia [3], I have not yet made any attempt to tackle the subject and doubt whether I can make the time but I certainly think that something of that sort is very necessary. If I can see my way to doing anything useful on the subject, I will write to you again about it. It is possible that in August and September, when neither the Empire Marketing Board nor the Imperial Economic Committee will be sitting, I might be able to do something of the sort-although this year I ought to arrange to take some holiday as four years have elapsed since I had any larger break than the one which I obtained when I came to meet you at Port Said.

You referred to the lunch which the High Commissioner [4] gave to Hacking [5], Hamilton [6] and Clark. [7] I am sorry to say that this was the first and last of what I had hoped would be a series of small lunches. The idea that I put up was that if the High Commissioner established the idea of a small fortnightly lunch at Australia House, he would be able to do two or three things at the same time very effectively, namely, to educate a large number of people that matter with the Australian point of view, to extend pleasant hospitality at an extremely reasonable cost and perhaps establish a new standing for Australia House in British Governmental and Parliamentary circles.

I was very amused by your comment about my referring to Tom Johnston [8] as a 'boon companion'. It was most misleading if I gave any such impression. Johnston is a strict teetotaller and has, to the fullest extent, the Labour suspicion of anyone who is not a comrade-suspicion which I expect is based on an inferiority complex. Nevertheless I have a warm regard for Johnston.

With reference to Simplified Practice, I will try to obtain full information as to the attitude of the Board of Trade to the proposals put forward by Julius [9] as soon as I can and forward them to you.

Regarding your comments on bringing the importance of Empire Trade to the Conference of Employers and to Trade Unionists, I think you will be interested to know that the tendency of the best moderate opinion on both sides is that it is desirable to prolong this Conference or rather to convert it into a series of meetings lasting over many months. It is felt that there is everything to gain and nothing to lose by keeping the discussions going and that the mere fact of the discussions will tend towards industrial peace and to a more reasonable attitude on the part of both Employers Associations and the Trade Unions.

I had a talk to Cramp [10] on the subject of bringing the Empire into the programme and he thought that at present it would not be desirable. I shall try to have a talk with Mond [11] in the course of the next few weeks on this subject. I am also anxious to do everything I can to get a reasonable discussion of Empire development at the Commonwealth Trade Union Conference which has been summoned to take place in London in July. I should be very grateful if you could let me have any information about the Australian Delegate or Delegates to this Conference.

With regard to Rationalisation of Industries on an Empire basis, my one disappointment in your letter was that you had not been able to give me a fuller account of your reactions on my letter of the 19th of January. [12] I have written a very carefully worded article on this subject for the Special Empire Products Number of the 'Times Trade Supplement' and hope to forward a copy of the draft by the next mail. I am very glad to find that you regard this as a matter of first rate importance and I hope that it will be possible to make such progress that, when the next Imperial Conference occurs, we may be able to place some such subject on the Agenda and have a really useful discussion.

In your letter you refer to the Irrigation Conference [13] over which you presided at Canberra. I have read the press accounts with very great interest and both Rivett [14] and Gepp [15] have told me how successful it was. My own feeling is that your Pastoral Committee ought to take the problem of Fodder Conservation and the fattening of stock bred in the dry district around the Murray and the [Darling] and consider these two questions in very close relation to the whole scheme of the Murray Valley Development. I have written to Gepp strongly suggesting to him that the question of the foundation of the great export industry in pig products based, to a certain extent, on production in irrigation areas is worth the closest attention of his Commission.

The Imperial Economic Committee commence their enquiry into Pig Products next week and perhaps the publication of the report may be a suitable occasion for the Commission to raise the whole question of the pig industry in Australia.

BRITISH MEAT SUPPLIES

In my letter of April 5th I enclosed a letter from the 'Times' on the subject of Argentine foot and mouth disease [16] and have mentioned to you an idea that had occurred to me as regards the restrictions of meat imports from infected countries to port areas. I am now enclosing an article from the 'Times' on this subject [17] which I think was written by the Agricultural Editor.

You will see that he has taken up my idea, although only just to the extent of mentioning it. You will probably like to pass this letter on to your Pastoral Committee.

BRITISH MOTOR INDUSTRY

I am enclosing an important letter which Sir Robert Home [18] addressed to the 'Times' on April 16th and a reply which appeared today from Alfred Hacking. 19 I am also enclosing a copy of a memorandum which I submitted to the Committee of Civil Research which is enquiring into the Empire's Mechanical Transport problems.

GREAT BRITAIN AND WORLD TRADE

I am enclosing a copy of a memorandum which I have just completed on this subject, which I think you will find of very distinct interest. The graphs which illustrate it are very striking. It seems to me that anyone who reads this memorandum carefully cannot possibly continue to believe that the depression in British industry is due to world impoverishment, although this appears still to be the thesis of the Committee on Industry and Trade which is presided over by Sir Arthur Balfour. [20] By next mail I will forward to you a further half-a-dozen copies of this memorandum, as I think you may find it useful to hand to some of your colleagues. I shall send copies direct to Mr. Latham [21], Sir George Pearce [22] and Mr. Paterson. [23] I am not sending further copies by this mail as the memorandum is only just complete and there are one or two small textual alterations which have not been made on the other copies. [24]

I should particularly like to have your comments on the situation as revealed in this memorandum. The basis throughout has been the League of Nations statistics, a source which I imagine even the most virulent classical economist will not regard as being suspect. In the memorandum I have deliberately refrained from propaganda, except on the last page. It seemed to me better to state the case, leaving it largely to the reader to draw deductions. I would particularly like you to notice the table on page 14, which is very striking.

Yours sincerely, F. L. MCDOUGALL