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My dear Prime Minister,

By this mail you will be receiving rather a mass of matter from me but I am making up for lost time.

DEBATE ON BOARD OF TRADE VOTE

I think you should glance through the Hansard record of this debate, as it illustrates in a very unmistakable way the general agreement among parties as to the need for Empire development if the British industrial problems are to be solved. [1] I would particularly draw your attention to the speeches of the Rt. Hon.

William Graham [2], as the official spokesman for the Opposition, and to that of R. G. Boothby. [3] Graham's speech was based upon my memorandum on 'Great Britain's position in World Trade [4] and I have marked the parts which are directly drawn from that memorandum. It seems to me most significant to find the official speaker for Labour calling for greater zeal in Empire development and stressing the point that there is no necessary antithesis between Empire trade and foreign trade. Boothby had obviously read my paper on Empire Rationalization.

I draw your attention to these points not in any egotistical spirit but because it is useful to realize the way in which it is possible to influence opinion by quiet methods. [5]

GERMANY AND THE WORLD ECONOMIC CONFERENCE

At the Consultative Economic Committee a very interesting paper was circulated. This was the opinions of the Economic Council of the Reich upon the report of the World Conference. I am enclosing the document. I have meant to forward it earlier but my illness prevented my doing so. I think you may decide that the document would be useful to your Committee on the Tariff.

21.6.28

YOUR LETTER OF 14TH MAY

Since writing the above, your letter of the 14th of May has come to hand. I very much hope that you will have arranged completely to clear up the question of the 75% of British labour or material required in order to obtain British Preference. [6] Quite apart from the question of the height of the Australian Tariff on certain types of goods, it is of really great importance that the method of administration of the tariff and the interpretation of certain clauses should be made perfectly clear. There is a feeling here that the treatment of British imports into Australia has not always been quite equitable and I am sure that you will agree that it is both important and urgent that that charge should be completely disposed of.

I am glad that you found the eighth report of the Imperial Economic Committee useful. The Sub-Committees of the I.E.C. are now working at very high pressure and I hope that, before the end of July, we shall have completed the reports on Tobacco, on Timber and the preliminary survey on Agricultural Machinery. This latter has proved a task of exceptional difficulty owing to the lack of comparable information and statistics but it has also presented problems of great interest and I think that the Committee will be able to present a survey which will arouse quite wide interest and thoroughly justify your proposal that the Terms of Reference of the I.E.C. should be extended in the direction of these trade surveys.

The Tobacco report will also, I think, be good but not of any very special interest to Australia, except on the research side.

The Timber report is not yet sufficiently advanced to enable me to form an opinion as to its probable value. My illness was rather a serious factor from the point of view of the Timber report as I am the Chairman of that Sub-Committee.

I was ever so glad that you and also your Pastoral Committee found Duckham's [7] report on Grass Conservation stimulating and useful.

At a meeting of the Full Empire Marketing Board yesterday, presided over by Amery [8], I arranged for Walter Elliot [9] to refer to your cable expressing Australia's interest in this report and further expressing the hope that the E.M.B. would continue to study the problem. It was decided that the matter should be referred to the Research Grants Committee for consideration as to how best further exploration in the matter could be expedited.

In your letter you say that you expect that I shall spend a good deal of time in trying to give information to the Business Mission before they leave. [10] I have already written you under separate cover a note about Sir Arthur Duckham [11] but I should like to say how glad I am to have got just that line of encouragement from you. I was not quite sure whether you would have rather that the Business Mission should have come to Australia with their minds free from any preconceptions about Australia but, having regard to the short space of time that they will actually be in Australia, it seemed clear that they should be given all possible information before they leave. This, of course, is what the members of the Mission themselves actually desired and, with the encouragement which you have given me, I shall do everything in my power to assist them to obtain a clear picture of existing conditions and a very definite conception of the immense dynamic possibilities of Australian development.

With reference to the question of foot and mouth disease, to which you refer in your communication, I am enclosing an extract from the 'Review of the River Plate' which has considerable bearing on the subject. I had a talk with Lord Stradbroke yesterday, who, as you know, is now Parliamentary Secretary to the Ministry of Agriculture. He tells me that the Ministry see the greatest difficulty in doing anything to control the importation of beef supplies from the Argentine and further stated that, although the Scientific Veterinary Authorities had definitely proved that the virus of foot and mouth remains virulent in chilled or frozen meat for a very considerable period, yet the Ministry had not been able definitely to connect meat imported from the Argentine with any individual outbreak of the disease in the United Kingdom. At the same time, farmers and the Agricultural Members of Parliament are beginning to take a very active interest in this question and I think it highly probable that, in the course of the next year or two, the British Government may find itself forced to take some form of definite control over importations of meat from infected areas. [12]

ECONOMIC ACTIVITIES OF THE LEAGUE OF NATIONS

I do not know whether you are aware that, at the last meeting of the Council of the League of Nations, the report of the Consultative Economic Committee was presented to the Council and in the discussion on that report the Italian Member of the Council raised the whole subject of the League of Nations Economic activities. [13] I am obtaining, through Major Fuhrman [14], the Minutes of the discussion and hope to be able to forward them to you by the next mail.

I had a very interesting talk on this subject with Major Walter Elliot last night. Elliot expressed the view that he was equally convinced of two things in connection with Geneva; firstly that, on the whole, the work of the Economic Organization of the League was good and, secondly, that the work of the International Labour Office was bad. We discussed the Italian caveat and I made the suggestion to Elliot that, as the British Empire contributes a very large percentage of the annual budget of the League of Nations, the British Empire Delegation at the next Assembly should be prepared to support a reasonable continuation of the economic activities of the League, provided that it was clearly understood that the work undertaken by the Economic Organization should be, to a large extent, work of which the British Empire countries approved. Elliot said that he thought this was a particularly useful suggestion. We agreed that one of the most important factors for Great Britain and the Dominions at the present stage of things was the possibility of the peoples of these countries obtaining a really clear picture of where the British Empire stands in relation to the progress made by other countries, and also that the realisation of this position must depend upon the provision of full, clear, comparable information and statistics and further that an International body, such as the Economic Organization of the League, was far the best source of such information.

I propose to go more fully into this subject and hope to write to you by next mail giving a considered opinion on the views expressed by the Italian Member of the Council and further elaborating the point which I have just made above. I want to do this as soon as possible so that you may give it your consideration and perhaps inform the Australian delegation as to the line of action which it should be prepared to take.

Yours sincerely, F. L. MCDOUGALL