19th February, 1925
PERSONAL & CONFIDENTIAL
Dear Mr. Bruce,
NEW PREFERENCE CONDITIONS
The announcement of the final form of the new conditions governing
preference to British goods in Australia has so far been very well
received here. [1] The Board of Trade and the Federation of
British Industries both seem really pleased. The Manchester
Guardian and the Yorkshire Observer, both Free Trade papers, have
expressed the view that the Commonwealth Government has seriously
tried to meet the difficulties of the British manufacturer. The
Times has not yet commented, but the Editor of the Times Trade
Supplement [2] came to see me and I think that his article will be
on favourable lines.
The chief comments that I have heard have been, firstly, great
interest as to how the Commonwealth Government will interpret the
words 'commercially possible' and, secondly, surprise that the
list, which the Department of Trade and Customs will issue, of
goods which can be regarded as being not made in Australia for the
purposes of preference, should be compiled on that negative basis.
The hope is expressed that the Commonwealth Government will
include in the list of all goods that are not of some industrial
importance in Australian manufactures.
My own feeling is that there would be some advantages from the
Commonwealth Government's standpoint in having a positive list. In
other words that the Department should schedule all the important
Australian industries and put the onus on small and inefficient
Australian manufacturers to show that other goods that they desire
included in the list were manufactured in Australia on a real
commercial basis.
I am extremely glad that the conditions have been revised in the
way that they now appear for this reason: that before the final
conditions appeared, there was a rather unpleasant undercurrent of
feeling that the Commonwealth Government was trying to whittle
away the chief purpose of the preferential tariff. As an example
of this, I was lunching with d'Egville [3] and Mr. Samuel [4], the
Head of the Department of Overseas Trade. Mr. Samuel said 'what is
the use of our trying to inaugurate a real policy of Empire
development, when Australia brings in these new conditions which
will destroy the very meaning of preference.
2. THE LABOUR PARTY AND FISCAL POLICY
I have been in touch with Haden Guest [5], Tom Johnston [6] and
other Members of the Labour Party and I gather that a very
interesting development is taking place inside their ranks.
On Monday, in the debate on the Safeguarding of Industries, Haden
Guest spoke and voted with the Government against Ramsay
MacDonald's [7] resolution. [8] He tells me that, instead of being
ostracized as a result of this action, he is receiving
appreciation from many Members of his own Party.
Tom Johnston, who you may remember is one of the Clydeside group,
tells me that he and Wheatley [9] (who is aspiring to the
leadership of the Labour Party) are determined to do everything
that they can to prevent the importation of competitive goods
produced by sweated labour into Great Britain and that they are
prepared to extend their idea to goods, the product of what they
would regard as sweated labour, that compete with Dominion
produce. If this development is encouraged, it ought to result in
very considerable benefit to us.
3. THE LABOUR COMMONWEALTH GROUP
Sir Howard d'Egville tells me that, in the new Parliament, the
Labour [Commonwealth] Group consists of 60 members of whom from 30
to 40 regularly attend the meetings of the Group, which are held
in d'Egville's rooms. Apparently the seed that Australia has sown
in this soil is growing well and should bear interesting fruit.
4. APPLES
On the initiative of an official representative of the British
Columbian Growers, a private Committee has been established to
consider the possibility of an Empire Central Committee for
assisting the Empire Apple industry. This is chiefly the result of
the British Government's proposal to place a million pounds at the
disposal of the Imperial Economic Committee.
The view that is taken by the Members of the Committee is that the
most essential improvement that could be achieved to help Empire
Apple producers would be some method whereby the whole of the
finance of packing and shipping should be met from a source
entirely separate from the Commission Agents and Brokers in this
country.
The Agent-General for Tasmanian [10] has put forward the views of
the Tasmanian Fruit Advisory Board, which are, roughly speaking,
the views which Ashbolt [11] and I discussed with you.
5. MEAT PRICE FIGURES
I am enclosing figures showing the average price obtained for
Argentine frozen and chilled and Australian frozen beef for the
years 1913, 1914, 1923 and 1924 because I think that you will be
interested to see that the margin between frozen and chilled has
not been as great as is frequently stated.
6. MALTING BARLEY
Mr. E. A. Box, who was Official Secretary at Australia House and
is now the Managing Director, I believe, of the White Horse
Distilleries, is very much impressed with the possibilities of a
large trade in Malting Barley from South Australia to this
country. He tells me that, for the purposes of distilling, South
Australian Barley in good condition is worth a number of shillings
per quarter more than any other Barley in the world but that the
trouble is that distillers will not buy in any large quantities
unless they can obtain a guarantee that shipments will be free
from weevil.
This matter was discussed in January 1922 and referred to the
Department of Trade and Customs in Melbourne. I am forwarding
copies of this correspondence which Mr. Box has provided me with.
I believe that there are possibilities of a very substantial
development in this direction which you might feel inclined to
take up some time when you are visiting South Australia.
With reference to my letter of February 5th [12], Section 4, I am
enclosing Appendix No. 8 to my Memorandum for Sir Arthur Balfour
[13] Committee.
I understand that the Colonial Office are anxiously awaiting your
nominations to the Imperial Economic Committee as they desire it
to function immediately.
Yours sincerely,
F. L. MCDOUGALL