23

11th June, 1925

PERSONAL & SECRET

Dear Mr. Bruce,

I was very pleased to receive a letter from you dated 1st May. [1] I quite understand that it is impossible for you to reply to my many long communications. It is, however, encouraging to hear occasionally from you and to know that you find time to read all the matter which I forward.

IMPERIAL ECONOMIC COMMITTEE

In my last letter of the 4th June, I discussed at considerable length the work of the Imperial Economic Committee and tried to give you a forecast of the points which I thought it probable would be incorporated in the first report. Since my letter, we have had another full meeting of the Committee and a further general discussion. Once again attention was concentrated upon identification.

It may be a little difficult for me to realise with what patience it is necessary to pursue any objective on a Committee such as the Imperial Economic Committee. After looking at the cable you sent to Sir Mark Sheldon [2] at the commencement of our work, I rather feel that you may be disappointed if the forecast which I gave in my last letter represents the major portion of any recommendations which the Committee is able to make in its first report. If this should prove to be the case, I would suggest that the attitude to take will be that the Imperial Economic Committee faced with its huge problem realised that there were four broad ways of solving the problem.

1. Tariffs.

2. Subsidies.

3. Methods other than tariffs for regulating imports.

4. Mobilizing the British consumer to prefer Empire goods by (a) identification (b) organization (c) advertisement.

The Committee was debarred from Tariffs [3], rightly regarded Subsidies as a last resort, has not yet examined (3) but decided that whatever further methods might ultimately be availed of, the three points enumerated under (4), namely Identification, Organization and advertisement, were essential first measures if any other plan was to be fully successful; it therefore very properly concentrated initially upon (4).

BOOK

With reference to my book, as you know Lord Milner [4] had agreed to write a Preface. Just before he was taken ill, he wrote to me to say that, under medical orders, he had to refrain from any work. I therefore got Sir Robert Horne [5] to write a Preface and he did it very well but, unfortunately, kept me waiting for nearly a month before I got his copy. Every-thing is now complete, including the Index, and I hope that Murray's will publish the book within the next three weeks.

Sir Robert Horne was good enough to express himself as being very pleased indeed with the book which, he said, he thought should be of the greatest value to people interested in Empire Trade.

DRIED FRUIT BROCHURE

I am enclosing copy of a small illustrated brochure which I prepared to shew people in Great Britain that in contra- distinction to Smyrna we produce clean and wholesome dried fruits.

Copies are going to the whole of the British Press and we have had 100,000 copies printed for circulation at Wemble [6] and to Retailers.

LABOUR PARTY DEVELOPMENTS

This week very interesting developments have occurred in the Labour Party. The party holds 145 seats in the House of Commons.

91 Members have now joined the Labour Commonwealth Group, a group formed 13 months ago and the initial meeting of which enrolled 15 members. The Members of the group are, of course, not pledged to uphold preference or any other tenet but simply to a study of Empire problems. The influence of the Group upon the whole parliamentary Labour Party can be gauged from what has happened in the last two days. The party set up a Committee to consider action in regard to the Budget. Philip Snowden [7] was Chairman. Quite apart from this Committee, certain Labour Members in the name of the party put down two amendments to the Finance Bill referring to the preferential clauses. The first was to alter the date of application of preference from July 1st, 1925 to January 31st, 1926, and the second was to omit the preferential clauses from the Finance Bill. On Tuesday the Budget Committee considered these amendments and after prolonged debate decided to recommend the Labour Party to cancel these amendments and to offer no opposition to the preferences except to the 10 year stabilization of the Sugar preference. The Free Traders in the Party, however, took fright. On Wednesday a full Party Meeting was summoned. Snowden, Lord Arnold [8], Lees-Smith [9] and others battled for attacking preference; Ramsay MacDonald [10] threw his weight into the attack. Then Haden Guest [11], Tom Johnston and other keen Empire men spoke in favour of the preferences. J. H. Thomas [12] for the first time declared in favour of preference, and a vote was taken.

It was decided by 6 votes to retain the amendments but it was decided on the plea of Arthur Henderson [13] that the Labour Party should not officially support these amendments. I understand that the Labour Whips will be off for the Preference Debate. The full significance of the development as shown at the Party will not become apparent immediately but the rapidity with which Empire ideas are infiltrating the Labour Party exceeds even my expectations. Whatever else may happen, I think that you and I may claim that in this direction we have helped the British Empire in no small measure. The meeting had a tragic aspect. Poor old Wignall [14], after speaking vehemently in favour of preference, collapsed and died within a few hours.

The Labour Commonwealth Group preferentialists are divided into two classes:

(A) The Clydesiders led by Wheatley [15], Johnston, and Maxton [16] who are (for tactical purposes) developing preference purely on Labour lines, i.e. advocating preference to goods produced in Empire countries where high standards of working conditions prevail.

(B) Haden Guest, and now Dalton [17] and J. H. Thomas, who develop the broader issue.

Since I wrote the above, I see that to-day's 'Times' and 'Daily News' devote a column to the meeting which was supposed to be secret. I enclose cutting.

I have to-day cabled you in reference to this matter as fellows:-

At Labour Party Meeting yesterday Commonwealth Group secured free vote of labour party on present preference resolutions and lost resolution to withdraw all labour amendments thereto by six votes.

J. H. Thomas declared for preference for first time. [18]

DR. HADEN GUEST'S ARTICLES

I am enclosing cutting from the 'Daily Mail' which shews that Haden Guest's articles have been taken seriously in Turkey.

AUSTRALIAN SWEET WINE

I am enclosing copy of letter which I received to-day from Mr.

Etchell, of the Vine Products Co. Ltd. I have had indications from other quarters that there is now a considerable amount of interest arising in Australian Sweet Wines. Mr. Etchell's firm is particularly interested and he told me the other day that if he could get the quantities, he would be prepared to back his opinion by buying 250,000 gallons of Australian Sweet Wines. I think you may find the information in this letter of some value if you are discussing the wine question with the Viticultural Council.

With reference to Wine, from the enquiries I have had, I am quite sure that if the Viticultural Council would arrange for a small supply of their choicest wines, especially white dry wines such as the De Pury vintages, Quelltaler Hock etc. to be available in London, I could easily arrange with such places as the Restaurant of the House of Commons, the Carlton Club, Brooks' Club and a few other places of that sort to stock some of the very best Australian wines. This would have the most excellent effect on public ideas of Australian wines because once it became known that exclusive people used Australian wine at lunch or dinner, the greater part of the British people would be open to our bread and butter lines.

I discussed this with Davy Masterton [19] before I left Melbourne and he promised some action but I have heard nothing from him since.

You will probably have seen that Sir Edward Grigg has been appointed Governor of Kenya. In a way I am very sorry. Grigg had become a very convinced preferentialist and, as a Liberal Member of Parliament and a whole hearted supporter of preference, he would have been very valuable to the cause. I should think that he would be a success in Kenya but I feel that we could ill afford to lose men of his type from active politics here.

Yours sincerely, F. L. MCDOUGALL

1 See note 1 to Letter 22.

2 Senior Australian representative on the Imperial Economic Committee.

3 See note 7 to Letter 22.

4 Lord Milner had been Governor of the Cape of Good Hope 1897- 1901, Governor of Transvaal and Orange River Colony 1901-05 and High Commissioner in South Africa 1897-1905. He entered Lloyd George's Cabinet in 1916, becoming Secretary for War in 1918 and Secretary for the Colonies 1919-21. He died on 13 May 1925 Milner's work served as inspiration for idealistic imperialists.

5 Philosopher, barrister and Conservative politician (portfolios included the Board of Trade 1920-21 and the Exchequer 1921-22);

chairman and director of major firms.

6 Location of the British Empire Exhibition 1925.

7 Labour M.P.; free trader; Chancellor of the Exchequer 1924.

8 Under-Secretary for the Colonies 1924.

9 H. B. Lees-Smith.

10 Leader of the Labour Opposition.

11 L. Haden Guest.

12 Colonial Secretary 1924.

13 Leader of the Parliamentary Labour Party 1908-10 and 1914-17 Home Secretary 1924; Chief Labour Whip.

14 James Wignall.

15 John Wheatley, Minister of Health 1924.

16 James Maxton.

17 Hugh Dalton.

18 Bruce commented in a letter dated 13 June that the free vote was 'certainly a vindication of the establishment of the Committees in the different parties'. The letter is on file AA:M111, 1925.

19 Vinegrower and distiller; president of the Federal Viticultural Council 1920-21; member of the Commonwealth Tariff Board.