My dear Prime Minister,
Since I last wrote by far the most interesting Imperial occurrence has been the Commonwealth Budget, with its announcement as to the increase of preference on British chassis, silk, artificial silk and films.
I am sure that you will be glad to hear this comment which I have just received from Sir Robert Horne , written from a Nursing Home at Putney where he is recovering from an illness. He writes:-
I am greatly excited by Australia's new Preferences. It is splendid of Bruce to do it, and it ought to give pause to those who would destroy the whole system of Imperial Preferences. I wish Canada would follow suit.
Rather unfortunately I did not hear about the Budget statement until after the press statement had been issued from Australia House. The office here only received the Budget statement at about half past five in the afternoon, and worked extremely hard merely to get a summary ready for the press. Had I been aware of what was happening I should have strongly urged that the summary should have drawn special attention to the significance of the new Preferences, and the very considerable assistance they are likely to be to British trade. I should also have urged that steps should have been taken gently to point out to editors that this action of the Commonwealth Government coming so immediately after Philip Snowden's  speech could only be regarded as a most generous act, and one which showed the intense desire of Australia for inter-Imperial economic co-operation.
IMPERIAL ECONOMIC CONFERENCE
I had a long talk with Sir Ernest Harding , in which Harding made it quite clear that he was personally strongly in favour of the Imperial Economic Conference being held in Ottawa. He thought that the holding of the Conference there would assuredly result in Canada being prepared to do a great deal to assist British trade, and he also thought that the Government here would feel much freer from embarrassment over preference questions if the Conference was held in Ottawa rather than in London. I pointed out to Harding that an Ottawa Conference would have much less effect on British public opinion than a London Conference. Harding said that he doubted whether I was right, and pointed out the enormous publicity that the discussions at the Hague  had just had. He acknowledged, however, that it was the 'silly season', when newspapers were only too glad of material, and he further acknowledged that if the British delegation to the Imperial Economic Conference at Ottawa consisted, as he thought it was likely to, of J. H. Thomas  and Graham , that the absence of Philip Snowden would render it difficult for the Dominions to feel very much reliance on the British Government necessarily endorsing the propositions accepted by Thomas and Graham. I felt that it was very desirable to cable to you on this matter, and I therefore asked Casey  to send you a message today asking whether you would like me to make any representations to MacDonald  and Graham in Geneva on this subject. Already I fear the matter has gone a very long way, for Harding told me that Canada had issued official invitations for the Imperial Economic Conference at Ottawa, and this morning's paper announces that Thomas has in Canada expressed the view that the British Government would be glad if the Conference was held there. I shall await your answer to my cable with very lively interest.
Whilst on the subject of the Imperial Economic Conference I should like to refer you to a rather interesting list of some of the factors which affect Empire trade. This list was prepared by S. G.
Tallents, the Secretary of the Empire Marketing Board, as the basis of the discussions of the Interdepartmental Committee which has been set up to consider the economic questions bearing upon the Imperial Conference. I enclose a copy of the list, and perhaps you will feel it worth while to pass on copies of this to Mr.
Gullett  and to Simpson's  Committee.
With reference to my memorandum on the growing dependence of British industry upon Empire markets, I have today heard that Lord Passfield  has approved of its being published as an Empire Marketing Board Grey Book.  This, I think, is all to the good, as it should lead to vigorous discussion.
Yesterday I saw Sir Basil Blackett , and found him intensely keen on this idea of an international group to discuss Empire economic matters. He is anxious, however, to eliminate Mackinder  from the group, and you will of course readily understand that I am in complete sympathy with Blackett in that idea. I therefore suggested that we should have a first meeting with Mackinder, as that was difficult to avoid, but that afterwards the meetings should, as far as possible, be held without Mackinder, although it might be necessary to bring him in once or twice.
I received your cable in regard to the Federal Viticultural Council's attitude about the Committee here, on synthetic wine, and as far as I can see there is no reason why I should not unofficially get in touch with that Committee, and represent the Council's point of view there pending the arrival of Angove.  Whether or not it is worth the Council's while to send Angove over is another matter. I can hardly imagine that they are going to the expense of sending Angove over purely for this purpose, but if he is coming over for his own purposes, or if the Council have other ideas, it may be quite sound. Angove is a pretty useful man, and would make quite a good representative. I am meeting two principal men on the British wine side at lunch today, and will probably send you a cable with regard to this matter tomorrow.
I am not looking forward with any eagerness to the five weeks of internationalism which I shall regard as commencing from my departure for Geneva on Saturday, but a good number of important matters may crop up. One of the difficulties is that I simply cannot afford to allow the whole of my work here to stand still for so long a period, and it will be necessary for me to have the bulk of my correspondence sent on to Geneva and perhaps to Rome for me to deal with there. I have not yet made up my mind whether it will be essential for me to have some person for some secretarial assistance, but if I find that this is necessary I shall probably arrange for my statistical secretary, who happens to be on leave in Savoy, to come to Geneva about half way through the Assembly, and stay to the end. This would involve a very small expense-probably not more than 25-and I think it quite likely that I shall come to the conclusion that it will be thoroughly justified.
Yours sincerely, F. L. MCDOUGALL