97

9th March, 1927

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

IMPERIAL ECONOMIC COMMITTEE

The first meeting since the Imperial Conference occurred on Tuesday, the 8th March. There was a fairly full attendance of members and Sir David Chadwick, the new Secretary, was present.

The Chairman [1] occupied about an hour and a quarter on a general and rather desultory statement concerning the existing situation.

It appears that, although your proposals to Amery [2] as regards the future work of the Committee were circulated to all the Delegations at the Conference before they left London and all the Delegations, with the exception of Canada, gave their approval to your proposals, yet owing to some oversight, no official communication was sent to India and no communication was sent to the Ministry of Agriculture in this country until this week. Up to the present moment Canada has not sent any reply to the terms of reference and naturally no official reply has yet been received from India.

On the assumption that favorable replies are received from Canada and India, the Committee decided to commence its new work on Fish and also to work on Pig Products and Tobacco in the hope that reports on these three subjects might be issued before August.

They also decided to complete the work that has already been commenced on Eggs and on Honey.

At my suggestion a Sub-Committee is to be set up to consider procedure and also to consider the preparation of a list of raw materials for the consideration of the Overseas Governments and also to make preliminary suggestions as regards the surveys of manufacturing products which were tentatively approved by the Imperial Conference.

I understand that cables are to be sent immediately to the various Governments of the Empire, asking their approval of fish, pig products and tobacco being the immediate subjects to be considered by the Imperial Economic Committee.

I have no idea what action you are likely to take as regards a second Australian representative. I understand that Professor Watt [3], who holds the Chair of Agriculture in the Sydney University, is expected to arrive in this country in the course of the next few days and, if he intends to remain here for some months, he might, at least temporarily, be a very good selection.

EMPIRE MARKETING BOARD

On the 16th February last I sent you a copy of a confidential report which I had prepared for the information of Mr. Julius. [4] I have now prepared an appendix to this confidential report on the decisions taken in regard to research by the Empire Marketing Board during the month of February. I am enclosing a copy for your information and I venture to suggest that you might find it desirable to have this attached to the first report as I intend to send to Julius confidentially a monthly summary shewing the actual decisions taken by the Board and I think you would find such a file occasionally useful for purposes of reference.

ATTACKS ON AUSTRALIAN TARIFF POLICY

The 'Manchester Daily Despatch', a nominally Conservative paper with a very large circulation, has launched an extremely severe attack on Australian tariff policy. Their first leading article stated that 'the Commonwealth of Australia adopted a more vindictive policy towards British goods than any other country in the world'. There were a number of other extreme inaccuracies and the whole spirit of the leading article was malicious. I drafted an answer which Sir Joseph Cook [5] signed but which the paper has so far not published. With the concurrence of the High Commissioner, I sent the article together with a copy of Sir Joseph's reply to Sir Philip Cunliffe-Lister [6] with an expression of the High Commissioner's hope that Cunliffe-Lister would take an early opportunity of exposing the arrant folly of articles of this nature. I am unable to enclose a copy of this article but I attach a copy of Sir Joseph's reply.

In Monday's issue of the paper another violent attack occurred, in which the last report of the Australian Tariff Board is rather effectively quoted. The concluding portions of the last Tariff Board report afford extremely useful ammunition to the British free trader in attacking Australian fiscal policy. [7]

DR. HADEN GUEST

I enclose a well informed and interesting cutting from the 'Manchester Guardian' on the subject of Dr. Haden Guest's action and its results. [8]

LOW [9] CARTOON

I feel sure that you will be very much amused at the enclosed cartoon by Low, which was printed in the 'Star'. It is, I think, one of the best of Low's efforts.

POLITICAL SITUATION

Last night a debate occurred in the House of Commons on the subject of Unemployment and I am enclosing the debate with two speeches marked as being worth your attention.

There is a very general feeling that the Government is rapidly losing ground in the country, owing to the lack of any constructive ideas as regards trade. It is generally felt that the economic policy of the Government [is] dictated by the Treasurer of the Bank of England, and that it is directed much more towards financial ends than to any special methods for restoration of industry. There is the usual talk about the long delayed recovery in the export trade being about to occur but I am a little doubtful as to whether this is based on anything more than hope.

The speeches of two of my friends-R. G. Boothby [10] and Tom Johnston [11]-although delivered from opposite sides of the House, do give some idea of the resentment that is being felt at the Government's policy of inaction.

PARLIAMENTARY ANSWERS

I enclose a few Parliamentary answers and questions which I think will be of interest to you.

Yours sincerely, F. L. MCDOUGALL

P.S. I enclose Hansard report of the House of Commons debate on 'Anglo-Russian Relations' to which I think you would like to have your attention drawn.

1 Sir Halford Mackinder.

2 Leopold Amery, Secretary for the Colonies and for Dominion Affairs. A cable dispatched to all Dominions on 7 March stated that 'in discussions after the close of the Imperial Conference' it had been suggested that the Committee investigate the marketing in Britain of fish, tobacco, pig products, wine, sugar, tea, coffee and cocoa. The cable is on file AA:CP78/22, 224/1926.

3 R. D. Watt.

4 George Julius, Chairman of the Commonwealth Council for Scientific and Industrial Research. A copy of the 'Memorandum on Official Organisation of Scientific Research in Great Britain(With Special Reference to Empire Agriculture)' is on file CSIRO: 1, 39/220.

5 Australian High Commissioner in London.

6 President of the Board of Trade.

7 In its report for the year ending 30 June 1926, the Board warned of the widening wages gap between the United Kingdom and Continental Europe, and Australia. It predicted economic disaster if increases in the tariff were to continue to be followed by wage increases. See Commonwealth Parliamentary Papers 1926-27-28, vol 4, no. 68, pp. 13-14 8 Manchester Guardian, 1 March. L. Haden Guest had resigned from the Labour Party.

9 David Low, a New Zealander who had worked for the Bulletin;

famous in Australia, especially for his caricatures of W. M.

Hughes; creator, in Britain, of the 'Colonel Blimp' character.

10 Conservative M.P.; Parliamentary Private Secretary to the Chancellor of the Exchequer, Winston Churchill. See House of Commons, Parliamentary Debates, fifth series, vol. 203, cols 1176-82.

11 Scottish Labour M.P.; Editor of Forward, a Glasgow labour paper. See his speech in the source cited in note 10, cols 1186-9.