My dear Prime Minister,

EMPIRE PRODUCTS NUMBER OF TIMES TRADE SUPPLEMENT

I have received your cable of May 3rd amending the draft article
for the Empire Products Number, and I have made the necessary
alterations together with a few essential adjustments of English.

BRITISH TRADE

In my last letter I commented upon an increase in unemployment,
this week's figures, however, show a substantial improvement and
this indicates how mistaken it is for me to send you such
ephemeral information.

While on the general subject of British trade, I should like to
draw your attention to a speech by Mond [1] made on Empire Trade
Unity together with the comments of the Manchester Guardian.

Mond is becoming increasingly keen on the idea of a gradual
movement towards Empire Free trade. While this idea itself is
impossible, there seems everything to be said for the examination
of the extent to which Inter-Imperial tariffs can be adjusted to
give a maximum impetus to Empire development and there is nothing
I would like to see more than an attempt to define what are the
reasonable limits of Australian, South African and New Zealand
industrial development for say a five or ten year period, and then
a decision to leave tariff mongering alone so far as additional
industrial protection is concerned.

Along these lines I think one could get a majority of the British
people behind preference to the Empire.

AUSTRALIAN TARIFF AND BRITISH TRADE

I was pleased to see a report in the press that Mr. Pratten [2]
will be in London before long. I very much hope that he will not
over emphasise the extreme protection policy.

In connection with this general subject, I am enclosing an
interesting cutting on the American success in South America,
which you may find distinctly useful. I am also enclosing an
interesting Parliamentary question and answer on the subject of
Australian duties on cotton and wool fabrics. Amery's [3] answer
to Pethick-Lawrence [4] was quite satisfactory and, as I know
Pethick-Lawrence, I am going to take up the matter with him
personally.

There can, however, be no doubt that instances of extreme
protection tend to make the publicity work of the Empire Marketing
Board very much more difficult. The rumour of the intention of
Australia substantially to increase the duty on woollen socks and
stockings is also having an awkward effect.

On the 16th March, and again on the 28th March [5], I wrote to you
on this subject and I sincerely hope that before the Tariff Board
makes definite recommendations to Parliament for an increase in
the duty of 45% ad valorem against British woollen socks and
stockings, they will have satisfied themselves that the really
efficient Australian Knitting Mills do require additional
protection and will not make the recommendation merely on the
basis of the efficiency of the average Knitting Mill, which is at
least conceivably not as high as it should be.

TRADE UNION BILL

In my letter of 7th April [6] I sent you some preliminary comments
on the Trade Union Bill. You will be receiving by this mail the
Hansard giving the full debate but it may interest you to know
that at the moment the impression is that the Government is
gaining ground not only in the House but in the country on the
Trade Union Bill discussions.

The Attorney-General, Sir Douglas Hogg, in spite of fierce Labour
interruptions, made an effective statement in introducing the
second reading and summarised the Bill in this way. He said that
the Bill was intended to support four major propositions:

1. that a General Strike i.e. a strike designed to coerce the
Government or the community, was illegal.

2. that intimidation was illegal.

3. that it was desirable that individuals should be free to choose
whether they desired to contribute to the funds of a political
party or not.

4. that Civil Servants held an undivided allegiance to the State.

Sir John Simon [7] speaking yesterday said that provided the
Government was prepared to accept amendments so as to rigidly
confine the Bill to those four points, he thought that the Labour
Party would have an unenviable time in the Constituencies in
saying that these four propositions were unjust or matters that
should be resisted.

Some of my Labour friends tell me that the Constituencies are
fiercely indignant at the Bill; on the other hand my Tory friends
tell me that there is a strong indication that the country is not
particularly interested in the Bill but on the whole sympathetic
to its objects. On the whole I am inclined to the opinion that if
the Government maintains a firm and yet reasonable attitude, it
will do itself considerable good in the country.

STATEMENT ON THE VALUE OF EMPIRE TRADE TO GREAT BRITAIN

In previous letters I have told you that I was working on a
general statement for the Empire Marketing Board on 'What the
Empire means to British Trade'. This preliminary survey is now
almost completed. It has involved a very great deal of additional
work which has mostly been done at night but will I hope prove a
really effective statement. On Monday next it is to be 'vetted' by
a small Sub-Committee of the Publicity Committee of the Empire
Marketing Board, of which Ormsby-Gore [8] is going to act as
Chairman. The document when it leaves my hands will consist of
about 30 foolscap pages of statement and about an equal number of
pages on statistical appendices. The idea is that the Empire
Marketing Board should, after the fullest consideration and after
all the statistics have been officially checked, print and issue
the statement.

'LONDON WEEKLY'

I enclose the 'London Weekly' dated 30.4.27.

SINGAPORE NAVAL BASE

I enclose a Parliamentary question and answer which may be of
interest. [9]

'A WHITE AUSTRALIA'

I am enclosing copy of a letter by the Bishop of London. [10] I
have no doubt this will reach you from other sources but it is of
sufficient importance for me to draw your special attention to.

Yours sincerely,
F. L. MCDOUGALL