28th June, 1928
PERSONAL & CONFIDENTIAL
My dear Prime Minister,
In my letter of the 19th June, in which I commented on the confidential report of the Tariff Committee , at the end I made certain suggestions about an economic research. Casey  has since sent me a cutting from the 'Herald' of the 26th April, which states that the Commonwealth Government has decided to appoint an Economic Council for Australia.
As I have heard nothing further about this, I am wondering whether the 'Herald' made an intelligent anticipation or whether it is true that you are contemplating such a move. I should, of course, be extremely interested to hear about it. 
Knowing how profoundly you are convinced of the importance of really sound economic research to the future of Australia's development both in regard to primary and secondary industries, I have some further ideas which I should just like to put briefly before you. in a way, you will probably agree that I am doing a certain amount of economic research here and at any rate that I am attempting to keep in pretty close touch with the economic tendencies and the actual facts of the world economic situation in so far as it affects Australia or Empire trade. In doing so I have, until about two months ago, been very materially assisted by a most excellent girl who has acted as my Statistical Secretary and who, as a result of about four years training with me, became extremely useful. Unfortunately she has left to be married and I am going to find it very difficult to replace her, especially as she was paid a salary which I think most people would regard as being very inadequate for the class of work which I frequently asked her to undertake.
It has occurred to me that, as part of the system of encouraging economic research, you might consider whether it would not be possible to adopt some such system as the C.S.I.R. has for scientific research students. What I have in mind is that, in order to complete the education of post-graduate students, the Council sends students to the United Kingdom, and indeed also to America, with a studentship of the value of 300 a year for two years, plus an allowance of 100 to meet special expenses such as those incurred in travelling about while in this country. I was wondering whether the same sort of idea might be applied to economic research but on a very much more limited scale and that one or two really bright post-graduates, who had done well in economics, might be sent overseas to obtain a wider outlook which is so essential if really sound economic research is to be undertaken. I think that if one such postgraduate were attached to me for a period of not less than 18 months and probably not more than 2 years, such an arrangement would result in the student obtaining a pretty wide grasp of economic facts and a thorough understanding of the atmosphere in the United Kingdom and also in Europe. It would also greatly assist me for I am continually conscious that, although I do a very considerable amount of work on this subject, the amount that could be done and the problems that could usefully be investigated are far greater than I have any hope of attempting to tackle as things stand. I do feel that some such arrangement might be a substantial advantage to Australia and I should like to suggest that you should give the matter your careful consideration.
Referring once again to the question of special pieces of economic research which I suggested might be farmed out to Australian Universities and to a much smaller extent through me to Economic Institutes in this country, I will merely make this one further suggestion that, when the Commonwealth Government has decided to whom to entrust the problems of economic research, that Body might perhaps be asked to invite me to make suggestions so far as liaison with this country is concerned.
Yours sincerely, F. L. MCDOUGALL