My dear Prime Minister,
By last mail I sent you several letters of which one long communication dealt with the subject of Pastoral Research. 
I was extremely interested to find that, when Monday brought the Australian mail, Julius  had sent me a copy of a long letter which he had addressed to Lovat , Ormsby-Gore  and Elliot  on the subject of the importance of Theiler  and Orr  being in some way permanently associated with Australian animal husbandry problems. This shows that Julius and myself were both reacting in the same way to the stimulus of Orr's ideas. It will be no easy task to arrive at some arrangement whereby Orr and Theiler may be available to a certain extent for Australia but I think it is quite possible that arrangements might be made whereby they were appointed consultants, the one in Animal Nutrition and the other in Animal Health and under such an arrangement would spend three or four months in Australia every two years. In these subjects there is an acute shortage of men of real vision and ability and it will be possible to establish an overwhelming case that their services should be available to the whole British Empire.
Last night the Empire Marketing Board gave a private dinner to the Business Mission. Amery  was in the Chair and Duckham , Clark  and Malcolm  turned up. I was sitting next to Malcolm and this gave me my first opportunity of getting a long personal talk with him, We arranged to meet again before he leaves.
Now that I know all the four members of the Delegation personally, it is clear that you have two men whose natural instincts will be in a free trade direction, namely Duckham and Malcolm, and two men who are more sympathetic towards a protectionist point of view in Sir Hugo Hirst  and Clark. This makes a very useful mixture.
The latter part of the evening proved extremely amusing. It had been arranged that there should be no speeches but when we adjourned to the adjoining room, Walter Elliot got up and, in a most humorous little speech, suggested that Duckham and Amery should propose the health of Sir Warren Fisher , the Chairman of the Industrial Transference Board , Elliot making the statement that apparently the authors of the report of the Industrial Transference Board were entirely unaware that there had been an Imperial Conference in 1926 or that the phrase 'Equality of Status' had ever been heard of.
Duckham played up to Elliot's lead quite well and then Amery made a most amusing little speech on the Treasury mind.
I am quite sure that this was very good education indeed for the Business Mission and probably a good deal better than anything more formal. Amery and Duckham both stressed the point of view that, provided sufficient energy was put into development, migration would follow but that insistence on the transfer of unemployed on the lines of the report of the Industrial Transference Board would have a most detrimental effect.
I am arranging to have personal talks with each member of the Business Mission during the last fortnight before they leave.
EMPIRE MARKETING REPORT 
I am enclosing two quite interesting comments on the report. The first is a very able leading article from the 'Times Trade Supplement' and the second is an interesting criticism from the 'Economist'. Having regard to the 'Economist's' point of view, it is really interesting to find that the 'Economist' is prepared to give the Empire Marketing Board a guarded blessing. 
EMPIRE MARKETING BOARD GRANTS
Yesterday the Empire Marketing Board formally approved cooperation with C.S.I.R. on the Entomological scheme. I have already sent you a cable to inform you that the E.M.B. is going to contribute 62,000 spread over five years to Tillyard's  scheme. This is much the largest single contribution that the Board has yet made to any overseas project whether in the Dominions or in the Colonies, and in consequence I added to my cable to you the suggestion that you should send an appreciative cable to the British Government-a suggestion which I am perfectly sure you will not mind my making and one which you will probably act upon. 
Now that the Entomological scheme is definitely approved, I have this to say, that I think in future proposals made by Australia to the E. M. B. it would be wise for us not to appear to be opening our mouths too wide. I suggest that it is very much to the advantage of the Government and of C.S.I.R. to get British cooperation on a number of schemes and therefore that we should be prepared to put schemes forward in such a way as to make them attractive from the Board's point of view. In this case we saddled the scheme put forward to the Board with the whole cost of the entomological services of C.S.I.R.; that is to say that the Board was asked to pay half salary of Tillyard, half salary of Hill , Tillyard's No. 2, in addition to half the salaries of all the new men who were brought in to work the scheme. In my view it would have been better for us to have excluded the salaries of the two men whom C.S.I.R. have already engaged, namely Tillyard and Hill. Please do not worry to take this question up with Julius and Rivett , because I have written quite definitely to them in the same way but if other schemes at a later stage come to your notice before they are put forward, perhaps you would just consider whether the actual proposition made to the E. M: B.
should not be limited to the expense necessary for the ad hoc proposition and should not include all the more or less permanent appurtenances.
Mechanical Transport 
The Empire Marketing Board yesterday also considered the Mechanical Transport question and decided to make available 60,000, spread over five years, provided that assurances were forthcoming that the Overseas Governments would be prepared to make an equal sum available. In view, however, of the urgency of getting to work on the problem and the length of time that must necessarily elapse before Amery could have consulted the interested Dominions and Colonies, it was agreed that the Empire Marketing Board should find the whole cost of the first year's work, namely 20,000, and therefore a lesser proportion of the expense than 50% during the other years.
I have sent Gepp  a cable to let him know of this decision.
I wrote to you and enclosed the report of the Sub-Committee of the Committee of Civil Research on Mechanical Transport on the 5th of July. It is difficult to say what sort of sum Australia ought to be prepared to find but everything depends on the number of Overseas Governments who will come into the scheme. I should think that Australia might contemplate an expenditure of (say) a maximum of one-sixth of the 60,000, which is required from Overseas.
Should Canada, New Zealand and South Africa be prepared to come into the scheme, then I think that Australia's contribution would be considerably less than a sixth. On the other hand, should none of these Dominions desire to come in and India also refuse to contribute, then perhaps Australia ought to be prepared to provide a little more.
I very much hope that we shall see some really important progress as a result of this expenditure and I certainly think that a businesslike arrangement has been made which promises well.
On Tuesday the Labour Party moved a Vote of Censure on the Government in regard to unemployment.  I had hoped to have been able to get down to hear the Prime Minister's  reply but that proved impossible. However, I took Sir Charles Nathan , who had not heard a Debate in the House of Commons, down at about 6 p.m. and we listened to about an hour and a half's discussion. I am forwarding the Hansard of the discussion with some of the interesting parts marked.
The Prime Minister's speech was very thin and uninteresting and has caused a great deal of disappointment in the Conservative Party, especially of course among the safeguarders but that is a subject to which I will return.
I was rather glad that Nathan should have been present when Tom Shaw , speaking officially from the Labour Front Bench, claimed that the Labour Party had as much interest in Empire questions as any other Party. The same note was struck, in a later stage of the Debate, by Philip Snowden. 
It is now unnecessary to emphasize the fact that the Labour Party is absolutely convinced that they must have an Empire point of view and that there are an increasing number of the members of the Labour Party who sincerely believe in the immense significance and importance of Empire development. Part of Philip Snowden's speech was particularly from this point of view, because he said in effect that Empire development resolutely prosecuted and supported by the utilization of large sums of money would lead more rapidly to the absorption of the unemployed in industry than any possible deliverance through assisted migration schemes. Whether Philip Snowden, as Chancellor of the Exchequer, would be prepared to find the large sums of money which he speaks about so cheerfully when in Opposition is, of course, an entirely different matter.
Earlier on Tuesday, I had a very interesting talk with Ormsby- Gore. He, as you know, is just back after being away for five months in Malaya, Java and Ceylon. Incidentally you may be interested to know of the immense impression which Java made upon him. He used the language of the Queen of Sheba and said that when he beheld the achievements of the Dutch Administration of Java 'behold a half had not been told unto me'. He gave me a very interesting short account of the way in which the political situation struck him after being away for these five months. He thought that the Conservative Party had developed a definite malaise chiefly due to the fact that most of the Ministers had been too long in the same offices. When one remembers that some of the Ministers were in the Coalition Government, in Baldwin's first administration and in his second, and the Labour interregnum was only ten months, it becomes apparent that some Ministers have been in the same office for eight or nine years. He also said that he thought that Baldwin was a very tired man who was getting on the whole more and more out of touch with the Party and with public opinion. He further told me that, apart from routine business, Amery's whole soul had become wrapped up in the idea of furthering the protection campaign in Great Britain and he regarded this as particularly unfortunate because it seemed so undesirable that the Secretary of State for the Dominions and Colonies, who should be the official interpreter of the importance of Empire Development to British people, used almost every possible opportunity of making a public speech to insist on the importance of the safeguarding of iron and steel, with the result that there was considerable danger of people once again associating together the two utterly distinct questions of Empire Development and Home Protection.
Ormsby-Gore did not seem to think that there was much likelihood of a definite revolt of the safeguarders but he thought more probably there would be a long slow battle in the Party between the safeguarders and Winston Churchill  and that probably the safeguarders would win.
Elliot confirms the view that there are very unhappy feelings within the Tory Party at the present time and that a sense of strong personal loyalty to Baldwin is mixed with a very considerable degree of irritation, especially after his speech on Tuesday.
I have just had Keith Officer  to lunch and was amused to hear from him that quite a little bit of excitement had occurred in the House of [Representatives] owing to Layton's  reference to the Report of the Tariff Board at the Consultative Economic Committee at Geneva. This shows how the press is capable of entirely distorting the relative significance of things. Layton, as an illustration for a point in his speech, just referred to the Report of the Tariff Board and I suppose occupied about one minute in describing it to the Committee. There was no further reference of any sort to the economic policy of Australia throughout the whole of the remainder of the meetings of the Committee. As I think I told you before, I was not even aware that the press had cabled anything to Australia about Layton's reference.
Yours sincerely, F. L. MCDOUGALL