25th March, 1929
PERSONAL AND CONFIDENTIAL
My dear Prime Minister,
I was extremely pleased to receive your letter of the 10th February  in which you have been good enough to go into a number of points raised by me. You deal with one or two points about the economic side of the Imperial Conference but you also say that you propose to write fully on the matter at a future date and deal with the whole question exhaustively. I imagine that I am to take it that the receipt of this letter of the 10th February, together with your promise to write exhaustively, is the answer to my cable of March 11th.  The fact that in this letter, which was written after you had received a good number of my communications about the Imperial Conference, you do not definitely disapprove of any of my lines of activity, is to be regarded by me as encouragement to go ahead along these lines pending the receipt of a full communication from you on the subject.
In your note on my letter of the 29th November  you say that you were decidedly interested in the points that I raised about publicity for Australia. The Committee that was formed as a result of the lunch has not functioned very well for certain personal reasons, which I need not worry you about. Suffice it to say that I came to the conclusion that we were not likely to see any very interesting report emanate from that Committee. About a fortnight ago, therefore, I got T. Tallents, the Secretary of the Orient Co., and Huxley , of the Empire Marketing Board, together for lunch and discussed with them the preparation of a memorandum on the subject of publicity for Australia. Subsequent to the lunch I put together the memorandum and sent it to Tallents and Huxley for their comments and then remodelled it on the line of those comments. I then sent it to Mr. Frank Pick , the Managing Director of the Underground Combine, who, as I have already told you, I regard as being the best man on such subjects in London, and also to Mr. Dougal Malcolm.  They both generally concurred in the memorandum but both made certain comments. I enclose copies of their letters so that you can see the type of comments they made. I also enclose a copy of the memorandum.
After Easter I am going to get Pick, Malcolm, T. Tallents and Huxley together to discuss the matter further and, if possible, to put up some more concrete and definite proposals to Gepp. 
'SHELTERED MARKETS OF THE EMPIRE'
In my last letter I sent you a copy of a series of small notes for speakers which I had prepared entitled 'Sheltered Markets of the Empire'. This I sent to some 100 Members of Parliament and to perhaps another 50 people in influential positions. They were mostly sent out in the middle of last week and I have already received some 50 personal acknowledgments, chiefly stating that information in this condensed form was extremely welcome. It is, I think, impossible to exaggerate the value of this type of propaganda conducted by means of personal letters.
I was most interested to read your comments on economic research and quite understand the reasons which have induced you to decide in favor of a separate economic research staff.  I can also understand why you think the question of attaching any individuals over here would have to be left for the time being. I wonder, however, whether it would not be possible to apply the Research Studentship idea to economic research. There is no doubt that, under the Research studentship scheme, extremely useful results are being obtained by C. S. I. R. and I venture to suggest that, in economic research, something of the same sort would prove particularly valuable. If Australia is really to appreciate the economic position of her principal agricultural and secondary industries, it seems of the utmost importance that study should be made of comparable industries in other countries; in fact in general the comparative method should be used as far as practicable. Supposing a research studentship was given to a promising young man who had taken a degree in economics in one of the Australian Universities and the studentship was made tenable in London on the understanding that the appointee was to be kept closely in touch with my work, I imagine that very useful comparative studies could be made with great advantage to the Bureau of Economic Research. 
Your letter reminds me that I was fool-hardy enough to make a forecast of the election results as early as last November. In my last letter I alluded to the results of two By-elections and, since I wrote, three more have occurred, in one of which a Scottish Conservative seat was captured by a young woman Labour candidate by an enormous majority and, in the other, an English agricultural constituency was captured by the Liberals. I am not at all sure that the Scottish seat can be regarded as typical, because the young woman candidate was not only a good political speaker but was also extremely attractive. I am much more concerned about the Liberal success in Lincolnshire. The idea of 80 to 100 Liberals in the next Parliament is far from attractive but one is beginning to think it may have to be faced.
ADVERTISING EMPIRE GOODS
I have referred to the way in which a movement to force the Government to participate in the advertising of Empire goods is growing and I am enclosing a cutting from the 'Manchester Daily Despatch' on this subject. This particular paper is always rather hostile to Empire trade but it may be worth your while to look at the article.
I am leaving London by tonight's boat for Sicily and am thus taking a holiday on both sides of Easter. My wife and children have been in Sicily for some months, where they have been lent a small villa on the edge of the sea between Taormina and Catania, i.e. right under Etna. My wife unfortunately has been very far from well for the last couple of years and it is necessary that I should discuss with her plans for herself and the children for the near future. I must be back in London by about April 11th, because I have a great deal to do and have arranged to address the Labour Commonwealth Group in the House of Commons on April 15th.
I have arranged to go via Basle and spend one night there in order to have a further discussion with Sir Arnold Theiler  about his plans for his one year in Australia.
Yours sincerely, F. L. MCDOUGALL