28th June, 1928
PERSONAL & CONFIDENTIAL
My dear Prime Minister,
In my letter of the 20th June, I wrote to you about the economic activities of the League of Nations and drew your attention to the attitude of the Italian Delegate  at the 8th meeting of the Council of the League-I am now enclosing a summary of the discussion that then occurred.
A conversation which I had yesterday with Tom Johnston  M.P.
has given quite a new importance to the whole subject. I found Johnston in a state of barely repressed fury over the I.L.O. and all its works. For a couple of years he has been trying to obtain from the I.L.O. information about wages and conditions in industries that compete with either British industrial commodities in which he is interested, or with Empire products in which he is interested, the two things which he has specially taken up being the jute industry of Dundee, for which town he is the member, and the comparative wages and conditions in the Argentine and Australia with reference to the question of meat supplies for the Army and Navy. He has never been able to get anything of any use out of the I.L.O. and definitely raised the question with a senior member of the I.L.O. staff who happened to be visiting London and was entertained by some of the Labour Party the other day.
I naturally encouraged Johnston in his attitude of hostility to the I. L. O. on its present basis and I think it quite likely that he will take an early opportunity of giving expression to his views in Parliament. Johnston takes this thoroughly sound attitude. He says that in order really to obtain the backing by British Labour for Empire development, it is necessary to connect Empire industries, and especially industries in the Dominions, with the idea of good labour conditions. To do that satisfactorily, it is necessary, in his opinion and in mine, to have from, if possible, an International authority definite information about wages and conditions in the various countries and that that information should be, as far as possible, upon a comparable basis. He maintains that this should obviously be one of the most important functions of the I.L.O., or, alternatively, of the Economic Section of the League of Nations.
I explained to him that, at the present time, the Economic Section of the League cannot touch wage questions because that is recognised as being the definite province of the I.L.O.
Johnston told me that this week there have been long and heated discussions in the Executive of the Labour Party on the proper attitude of the Party to the recrudescence of strong activity in regard to the safeguarding of industries, which has become obvious in the Tory Party during the last few months. As the result of a final meeting, which he said lasted until 3 a.m., he was able to obtain a unanimous decision that the Labour Party, instead of using the direct negative, should put forward their own alternative scheme, namely that where goods were produced under sweated labour conditions, International action should be sought for to boycott the importation of goods so produced. This policy is, I think, impracticable but the fact that it is likely to be put forward as the official Labour point of view will certainly cause a much stronger demand for information through Geneva.
In my official report to you on the work of the Consultative Economic Committee  and in recent letters, I have been stressing the importance to Australia, and to the whole Empire development move, of liberal provision of comparable information about the industry, agriculture and trade of the more important producing nations of the World and I have emphasized that an International Body is the only really sound source of such information. I have also given you my opinion as to the high level of the work of this description which the Economic Section of the League is capable of producing, Having regard to the whole situation, I should now just like to urge that you should give this question careful consideration and I hope come to the conclusion that the instructions given by the Government to the Australian Delegation to the Assembly in regard to the economic work of the League should be of such a nature as to allow the Australian Delegation scope to cooperate in any general Empire policy in regard to this matter which may have been evolved by September. One would like to see some arrangement which, without in any way glorifying the economic work of the League itself, would tend to concentrate the work of that Organization along more useful lines and would, at the same time, either directly or by implication register a certain censure of the I.L.O. for having neglected to provide information on wages and conditions which is obviously essential if progress towards levelling up countries which produce goods under sweated labour conditions with those who are more advanced is to make any real progress.
I am going to discuss this matter with Sir Harrison Moore , who is now at Australia House, and I shall certainly return to it in later letters.
Yours sincerely, F. L. MCDOUGALL